Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Application - Filer is a subsidiary of a U.S. corporationwhere U.S. parent is a credit supporter - filer is exempt frominterim and annual financial statement requirements (includingMD&A requirements), material change requirements and insiderreporting requirements - Relief subject to conditions, includingU.S. parent filing with the Jurisdictions, Forms 10-K, 10-Qand 8-K, when it files such with the SEC.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,s. 83.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, ONTARIO, BRITISHCOLUMBIA, QUEBEC,

MANITOBA AND NOVA SCOTIA

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TEXACO CAPITAL LLC

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (collectively, the "Decision Makers")in each of the provinces of Alberta, Ontario, British Columbia,Quebec, Manitoba and Nova Scotia (the "Jurisdictions")have received an application from Texaco Capital LLC ("TexacoCapital") for a decision under the securities legislationof the Jurisdictions (the "Legislation") that:

1. Texaco Capital be exempted from the requirementsof the Legislation, where applicable, to issue, file and sendto securityholders annual financial statements, annual report,annual information form, interim financial statements, management'sdiscussion and analysis of financial condition and resultsof operations, news releases in respect of material changesand material changes reports in respect of the affairs ofTexaco Capital (the "Continuous Disclosure Requirements");and

2. each insider of Texaco Capital be exemptedfrom the requirements of the Legislation to file insider reports(the "Insider Reporting Requirements");

AND WHEREAS under the Mutual RelianceReview System For Exemptive Relief Applications (the "System"),the Alberta Securities Commission is the principal regulatorfor this application;

AND WHEREAS Texaco Capital has representedto the Decision Makers that:

1. Texaco Capital is a limited life companyorganized under the laws of the Turks and Caicos Islands andits registered offices are located at Maclaw House, P.O. Box103, Duke Street, Grand Turk, Turks and Caicos Islands, BritishWest Indies;

2. Texaco Inc. ("Texaco") directlyor indirectly holds 100% of the common shares of Texaco Capital;

3. pursuant to orders granted by the DecisionMakers (the "Prior Orders") in connection with anoffering (the "Offering") of preferred shares, SeriesC of Texaco Capital ("Series C Preferred Shares"),the Decision Makers granted relief similar to the relief requestedin this application;

4. on October 9, 2001, Texaco became a wholly-ownedsubsidiary of Chevron Corporation pursuant to a merger transaction(the "Merger") and Chevron Corporation changed itsname to ChevronTexaco Corporation ("ChevronTexaco");

5. Texaco Capital has no securities outstandingother than the common shares held directly or indirectly byTexaco and the Series C Preferred Shares;

6. following the Merger, all Texaco securitieswere de-listed from U.S. exchanges and Texaco made filingson Form 15 with the U.S. Securities and Exchange Commission(the "SEC") to terminate its disclosure obligationsunder the Securities Exchange Act of 1934, as amended (the"1934 Act"). As a result of such Form 15 filings,Texaco was not required to and did not file a 2001 third-quarterreport on Form 10-Q with the SEC. Accordingly, such 2001 third-quarterreport or any subsequent report has not been filed with theDecision Makers and mailed to securityholders of Texaco Capital;however, ChevronTexaco has filed its 2001 third-quarter reporton Form 10-Q, its 2001 annual report on Form 10-K, its 2002first-quarter report on Form 10-Q, its 2002 second-quarterreport on Form 10-Q and its third-quarter report on Form 10-Qwith each of the Decision Makers;

7. Texaco and Texaco Capital complied withthe terms of the Prior Orders prior to the Merger;

8. ChevronTexaco is a corporation incorporatedunder the laws of the State of Delaware. Its principal executiveoffices are located at 575 Market Street, San Francisco, California,U.S.A.;

9. ChevronTexaco has outstanding securitieswhich are registered pursuant to Section 12 of the 1934 Actand such securities are listed on the New York Stock Exchange;

10. ChevronTexaco is required to file periodicreports with the SEC on Form 10-K, Form 10-Q and Form 8-Kunder the United States securities laws;

11. ChevronTexaco's filings with the SEC arepublicly available on the SEC's internet site (www.sec.gov),on ChevronTexaco's internet site (www.chevrontexaco.com),from commercial document retrieval services and at publicreference facilities maintained by the SEC;

12. ChevronTexaco indirectly holds 100% ofthe common shares of Texaco;

13. pursuant to a guarantee (the "TexacoGuarantee") which was entered into in connection withthe Offering, Texaco unconditionally agreed to pay in fullto the holders of Series C Preferred Shares, the followingamounts (except to the extent paid by Texaco Capital):

13.1 any accumulated arrears and accrualsof unpaid dividends which have been theretofore declaredon the Series C Preferred Shares out of monies legally availabletherefor;

13.2 the redemption price (including allaccumulated arrears and accruals of unpaid dividends) payablewith respect to Series C Preferred Shares called for redemptionby Texaco Capital as an optional redemption or otherwiseout of funds available to Texaco Capital;

13.3 the lesser of: (i) the aggregate ofthe liquidation preference and all accumulated arrears andaccruals of unpaid dividends (whether or not declared) tothe date of payment; and (ii) the amount of remaining assetsof Texaco Capital; and

13.4 any additional amounts required tobe paid by Texaco Capital under the terms of the SeriesC Preferred Shares to "gross up" for withholdingtaxes;

14. pursuant to a Guaranty Agreement datedas of January 1, 2002 (the "Guaranty Agreement"),ChevronTexaco unconditionally guaranteed the obligations ofTexaco pursuant to the Texaco Guarantee;

15. Texaco Capital remains a "reportingissuer" under the Legislation and, other than as setforth in paragraph 3.6, is not in default of any requirementsof the Legislation, as amended by the Prior Orders;

16. under United States securities laws, Texacoand Texaco Capital are not required to prepare and file annualreports on Form 10-K, quarterly reports on Form 10-Q or currentreports on Form 8-K separate from those prepared and filedby ChevronTexaco and Texaco Capital is not required to sendsuch reports to holders of Series C Preferred Shares;

17. the Series C Preferred Shares are non-votingsecurities, subject to the right to vote for the appointmentof a trustee in certain circumstances of default as describedin the (final) prospectus of Texaco Capital dated December12, 1995, relating to the Offering of the Series C PreferredShares;

18. as at the date hereof, the Series C PreferredShares are presently rated PFD-1Y by Dominion Bond RatingService, which is their highest rating category for preferredshares, namely "Superior Credit Quality";

19. Texaco Capital will cause to be forwardedto Canadian Depository for Securities Limited, the holderof record of Series C Preferred Shares of Texaco Capital,and distributed to beneficial holders of Series C PreferredShares, a letter advising as to the Guaranty Agreement andadvising that such holders are able to review financial informationin respect of ChevronTexaco on the SEC's internet site andChevronTexaco's internet site. Furthermore, such letter willadvise that Texaco Capital will provide ChevronTexaco's annualreport on Form 10-K to beneficial holders of Series C PreferredShares who request, in writing, to receive such report;

20. the Series C Preferred Shares resemblea debt instrument more than conventional equity. Under UnitedStates securities laws, ChevronTexaco is not required to transmitpaper copies of its SEC filings to holder of its debt securities;

21. pursuant to the Prior Orders, Texaco Capitalwas only required to provide Texaco's annual reports on Form10-K and quarterly reports on Form 10-Q to holders of SeriesC Preferred Shares whose last address as shown on the booksof Texaco Capital was in Canada. As the Series C PreferredShares were issued in "book entry only" form andall such shares are registered in the name of CDS & Co.,beneficial holders of Series C Preferred Shares were neverentitled to receive Texaco's Form 10-Ks or Form 10-Qs;

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met.

THE DECISION of the Decision Makers underthe Legislation is that:

1. the Continuous Disclosure Requirementscontained in the Legislation shall not apply to Texaco Capitalso long as:

1.1 ChevronTexaco promptly files with theDecision Makers, copies of the annual report on Form 10-Kfiled by it with the SEC;

1.2 ChevronTexaco promptly files with theDecision Makers, copies of the quarterly reports on Form10-Q filed by it with the SEC;

1.3 Texaco Capital provides Chevron Texaco'sannual report on Form 10-K and interim financial statementson Form 10-Q to beneficial holders of Series C PreferredShares resident in Canada, upon request;

1.4 ChevronTexaco files with the DecisionMakers copies of the reports on Form 8-K filed by it withthe SEC forthwith after the earlier of the date the reportis filed with the SEC and the date it is required to befiled with the SEC;

1.5 ChevronTexaco complies with the requirementsof the New York Stock Exchange in respect of making publicdisclosure of material information on a timely basis;

1.6 if there is a material change in TexacoCapital's business or affairs that is not a material changein ChevronTexaco, Texaco Capital will issue a press releaseand will file a material change report in respect of suchmaterial change;

1.7 all filing fees that would otherwisebe payable by Texaco Capital in connection with the ContinuousDisclosure Requirements are paid;

1.8 ChevronTexaco maintains direct or indirectownership of 100% of the outstanding common shares of TexacoCapital; and

2. the Insider Reporting Requirements containedin the Legislation shall not apply to any insider of TexacoCapital so long as:

2.1 each insider of Texaco Capital fileswith the SEC on a timely basis the reports, if any, requiredto be filed with the SEC pursuant to subsection 16(a) ofthe 1934 Act and the rules and regulations thereunder inrespect of trades of securities of Texaco Capital; and

2.2 ChevronTexaco maintains direct or indirectownership of 100% of the outstanding common shares TexacoCapital.

February 10, 2003.

"Agnes Lau"