Filed Pursuant to Rule 424(b)(3)

Registration No. 333-275695

TRANSACTION PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear Stockholders of Pioneer Natural Resources Company:

On October 10, 2023, Pioneer Natural Resources Company (“Pioneer”), Exxon Mobil Corporation (“ExxonMobil”) and SPQR, LLC, a wholly owned subsidiary of ExxonMobil (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), under which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Pioneer, with Pioneer surviving as a wholly owned subsidiary of ExxonMobil (the “Merger”).

If the Merger is completed, Pioneer stockholders will receive, in exchange for each share of Pioneer common stock, par value $0.01 per share, held immediately prior to the Merger, 2.3234 shares of ExxonMobil common stock, without par value (such consideration, the “Merger Consideration”).

Pioneer’s board of directors (the “Pioneer board”) has unanimously approved the Merger Agreement and recommends that Pioneer stockholders vote in favor of adopting the Merger Agreement.

Based on ExxonMobil’s closing stock price on January 5, 2024, the most recent practicable date for which such information was available, of $102.63, the Merger Consideration represented approximately $238.45 in implied value per share of Pioneer common stock, which represents a premium of approximately 10.9% over the closing price of the Pioneer common stock on October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions. The value of the Merger Consideration to be received in exchange for each share of Pioneer common stock will fluctuate with the market value of ExxonMobil common stock until the Merger is complete. The Pioneer common stock is listed on The New York Stock Exchange (the “NYSE”) under the symbol “PXD”. The ExxonMobil common stock is listed on the NYSE under the symbol “XOM”.

The Merger cannot be completed without adoption of the Merger Agreement by the affirmative vote of holders of a majority of the outstanding shares of Pioneer common stock entitled to vote thereon. Because of this, Pioneer is holding a special meeting of its stockholders on February 7, 2024 (the “Special Meeting”) to vote on the proposal necessary to complete the Merger. Information about the Special Meeting, the Merger, the Merger Agreement and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement/prospectus. The Pioneer board has fixed the close of business on January 5, 2024 as the record date for the determination of Pioneer stockholders entitled to notice of, and to vote at, the Special Meeting. We urge you to read this proxy statement/prospectus and the annexes and documents incorporated by reference carefully.  You should also carefully consider the risks that are described in the “Risk Factors” section beginning on page 30.

The Pioneer board has unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of Pioneer and its stockholders, approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, in accordance with the requirements of the Delaware General Corporation Law (the “DGCL”) and directed that the Merger Agreement be submitted to the Pioneer stockholders for adoption at a meeting of such stockholders. The Pioneer board unanimously recommends that Pioneer stockholders vote “FOR” the proposal to adopt the Merger Agreement and “FOR” the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Pioneer’s named executive officers that is based on or otherwise related to the Merger.

Your vote is very important regardless of the number of shares of Pioneer common stock that you own.

Whether or not you plan to attend the Special Meeting virtually, please submit your proxy as soon as possible by following the instructions on the accompanying proxy card to make sure that your shares are represented at the meeting. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction form furnished by the broker, bank or other nominee. You must provide voting instructions by filling out the voting instruction form in order for your shares to be voted.

The Special Meeting will be held in a virtual meeting format only. You will not be able to attend the Special Meeting physically in person.

Thank you for your continued support.

Very truly yours,

 

Richard P. Dealy

President and Chief Executive Officer

Pioneer Natural Resources Company

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Merger or the other transactions described in this proxy statement/prospectus or the securities to be issued in connection with the Merger or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated January 5, 2024, and is first being mailed to stockholders of Pioneer on or about January 8, 2024.

ADDITIONAL INFORMATION

The accompanying document is the proxy statement of Pioneer for the Special Meeting and the prospectus of ExxonMobil for the shares of ExxonMobil common stock to be issued to Pioneer stockholders as consideration in the Merger. The accompanying proxy statement/prospectus incorporates by reference important business and financial information about Pioneer and ExxonMobil from documents that are not included in or delivered with the accompanying proxy statement/prospectus. You can obtain the documents incorporated by reference into the accompanying proxy statement/prospectus (other than certain exhibits or schedules to these documents), without charge, by requesting them in writing or by telephone from Pioneer or ExxonMobil at the following addresses and telephone numbers, or through the Securities and Exchange Commission website at www.sec.gov:

 

Pioneer		ExxonMobil
777 Hidden Ridge		22777 Springwoods Village Parkway
Irving, Texas 75038		Spring, Texas 77389-1425
Attention: Investor Relations		Attention: Investor Relations
(972) 969-4019		(972) 940-6000 (General)
media@pxd.com		investor.relations@exxonmobil.com

In addition, if you have any questions concerning the Merger Agreement or the Merger or the other transactions contemplated by the Merger Agreement, or the accompanying proxy statement/prospectus, or if you would like additional copies of this proxy statement/prospectus or documents incorporated by reference herein, or if you need help voting your shares of Pioneer common stock, please contact Pioneer’s proxy solicitor:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call toll free: (800) 322-2995

Email: proxy@mackenziepartners.com

If you would like to request documents, please do so no later than five business days before the date of the Special Meeting (which date is January 31, 2024).

See “Where You Can Find More Information” beginning on page 146 of the accompanying proxy statement/prospectus for further information.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD FEBRUARY 7, 2024

To our Stockholders:

You are hereby notified that a Special Meeting of Stockholders of Pioneer Natural Resources Company, a Delaware corporation (“Pioneer”), will be held virtually at www.virtualshareholdermeeting.com/PXD2024SM at 8:00 am Central Time on February 7, 2024 for the following purposes:

 

a.

to vote on a proposal to adopt the Agreement and Plan of Merger, dated October 10, 2023, by and among Exxon Mobil Corporation, a New Jersey corporation (“ExxonMobil”), SPQR, LLC, a Delaware limited liability company and wholly owned subsidiary of ExxonMobil (“Merger Sub”), and Pioneer (as it may be amended from time to time, the “Merger Agreement”), under which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Pioneer, with Pioneer surviving as a wholly owned subsidiary of ExxonMobil (the “Merger”), which is further described in the section titled “The Merger Agreement” beginning on page 80, and a copy of which is attached as Annex A to the proxy statement/prospectus of which this notice forms a part (the “Merger Agreement Proposal”); and

 

b.

to hold a non-binding advisory vote to approve the compensation that may be paid or become payable to Pioneer’s named executive officers that is based on or otherwise related to the Merger (the “Advisory Compensation Proposal”).

Pioneer will transact no other business at the Special Meeting except such business as may properly be brought before the Special Meeting or any adjournment or postponement thereof by or at the direction of the Pioneer board of directors (the “Pioneer board”). Please refer to the proxy statement/prospectus of which this notice forms a part for further information with respect to the business to be transacted at the Special Meeting.

Only stockholders of record as of January 5, 2024 are entitled to notice of, and to vote at, the Special Meeting. The Special Meeting will be a virtual only meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/PXD2024SM starting at 8:00 am Central Time (with log-in beginning at 7:45 am Central Time) on February 7, 2024. You will be able to attend the Special Meeting and vote your shares electronically during the meeting by going to www.virtualshareholdermeeting.com/PXD2024SM and entering the 16-digit control number included on the proxy card or voting instruction form that you received. Because the Special Meeting is completely virtual and being conducted via live webcast, stockholders will not be able to attend the meeting in person. Participating stockholders who log-on to the meeting using his, her or its unique 16-digit control number will also be able to examine the stockholder list during the Special Meeting by following the instructions provided on the meeting website.

Stockholders attending the Special Meeting will be in a listen-only mode and will not be able to speak during the webcast. However, stockholders will be able to submit any questions by the close of business on February 6, 2024 in advance of the Special Meeting by visiting www.proxyvote.com. If you encounter any difficulties during the check-in process or during the Special Meeting, please call 844-986-0822 (U.S.) and 303-562-9302 (International), and a technician will be ready to assist you starting at 7:45 am Central Time and until the Special Meeting has finished. Please give yourself sufficient time to log-in and ensure you can hear the streaming audio before the meeting starts.

Completion of the Merger is conditioned on adoption of the Merger Agreement by the Pioneer stockholders, which requires the affirmative vote of holders of a majority of the outstanding shares of Pioneer common stock entitled to vote thereon. Completion of the Merger is not conditioned on approval of the Advisory Compensation Proposal.

The Pioneer board has unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of Pioneer and its

stockholders, approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, in accordance with the requirements of the Delaware General Corporation Law (the “DGCL”) and directed that the Merger Agreement be submitted to the Pioneer stockholders for adoption at a meeting of such stockholders. The Pioneer board unanimously recommends that Pioneer stockholders vote “FOR” the Merger Agreement Proposal and “FOR” the Advisory Compensation Proposal.

Your vote is very important regardless of the number of shares of Pioneer common stock that you own. If you plan to attend the Special Meeting virtually, please follow the instructions as outlined in this proxy statement/prospectus. Whether or not you expect to attend the Special Meeting virtually, we urge you to submit your vote in advance of the meeting. If your shares are held in the name of a broker, bank or other nominee, please vote by following the instructions on the voting instruction form furnished by the broker, bank or other nominee. If you hold your shares in your own name, submit a proxy to vote your shares as promptly as possible by (i) visiting the internet site listed on the accompanying proxy card, (ii) calling the toll-free number listed on the proxy card or (iii) submitting your proxy card by mail by using the self-addressed, stamped envelope provided. Submitting a proxy will not prevent you from voting virtually at the meeting, but it will help to secure a quorum and avoid added solicitation costs. Any eligible holder of Pioneer common stock may vote virtually at the Special Meeting, thereby revoking any previous proxy. In addition, a proxy may also be revoked in writing before the Special Meeting in the manner described in the proxy statement/prospectus of which this notice is a part.

The proxy statement/prospectus of which this notice is a part provides a detailed description of the Merger and the Merger Agreement and the other matters to be considered at the Special Meeting. We urge you to carefully read this proxy statement/prospectus, including any documents incorporated by reference herein, and the annexes in their entirety. In particular, we urge you to carefully read the section entitled “Risk Factors” beginning on page 30.

If you have any questions concerning the Merger or this proxy statement/prospectus, would like additional copies or need help voting your shares of Pioneer common stock, please contact Pioneer’s proxy solicitor:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call toll free: (800) 322-2995

Email: proxy@mackenziepartners.com

By order of the Board of Directors,

 

Akshar C. Patel

Corporate Secretary

Irving, Texas

January 5, 2024

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS			1
SUMMARY			12
The Companies			12
The Merger			13
The Pioneer Special Meeting			13
What Pioneer Stockholders Will Receive in the Merger			15
No Dissenters’ or Appraisal Rights			15
Treatment of Pioneer Equity Awards			15
Recommendation of the Pioneer Board of Directors			16
Opinion of Pioneer’s Financial Advisor			16
Ownership of Shares of ExxonMobil Common Stock After the Merger			17
Interests of Pioneer’s Directors and Executive Officers in the Merger			17
Governance Matters Following Completion of the Merger			17
Listing of Shares of ExxonMobil Common Stock and Delisting and Deregistration of Pioneer Common Stock			17
Completion of the Merger is Subject to Certain Conditions			18
The Merger May Not Be Completed Without All Required Regulatory Approvals			18
No Solicitation by Pioneer			20
Termination of the Merger Agreement			22
Specific Performance; Remedies			24
U.S. Federal Income Tax Consequences of the Merger			24
Accounting Treatment			24
Rights of Pioneer Stockholders Will Change as a Result of the Merger			25
Litigation Relating to the Merger			25
Risk Factors			25
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION			28
Market Prices			28
Dividends			28
RISK FACTORS			30
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			40
THE COMPANIES			42
Exxon Mobil Corporation			42
Pioneer Natural Resources Company			42
SPQR, LLC			42
THE PIONEER SPECIAL MEETING			43
General			43
Date, Time and Place of the Special Meeting			43
Purposes of the Special Meeting			43
Recommendation of the Pioneer Board			43
Voting by Directors and Executive Officers			44
Attendance at the Special Meeting			44
Submitting Questions for the Virtual Special Meeting			44
Limitations on Submitting Questions for the Virtual Special Meeting			44
Record Date			44
Participants in the Pioneer Natural Resources USA, Inc. 401(k) and Matching Plan			44
Outstanding Shares and Voting Rights of Pioneer Stockholders			45
Stockholder List			45
Quorum; Abstentions and Broker Non-Votes			45
Adjournment			45
Vote Required			46

 

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How to Vote			46
Record Holders			46
Beneficial Owners			47
Proxies and Revocation			47
Inspector of Elections; Tabulation of Votes			48
Solicitation of Proxies			48
Other Matters			48
Householding of Proxy Statement/Prospectus			48
Questions and Additional Information			49
THE MERGER			50
General			50
The Parties			50
Background of the Merger			51
Certain Relationships between ExxonMobil and Pioneer			59
Recommendation of the Pioneer Board of Directors and Reasons for the Merger			59
ExxonMobil’s Reasons for the Merger			64
Certain Pioneer Unaudited Prospective Financial Information			65
Opinion of Pioneer’s Financial Advisor			67
Regulatory Approvals Required for the Merger			75
No Dissenters’ or Appraisal Rights			77
U.S. Federal Income Tax Consequences of the Merger			77
Accounting Treatment			78
Listing of Shares of ExxonMobil Common Stock and Delisting and Deregistration of Shares of Pioneer Stock			78
Litigation Relating to the Merger			78
THE MERGER AGREEMENT			80
Explanatory Note			80
Structure of the Merger			80
Completion and Effectiveness of the Merger			80
Merger Consideration			81
Fractional Shares			81
Governance Matters Following Completion of the Merger			82
Procedures for Surrendering Pioneer Stock Certificates			82
Treatment and Quantification of Pioneer Equity Awards			83
Listing of Shares of ExxonMobil Common Stock			85
Dividends			85
Conditions to Completion of the Merger			85
Representations and Warranties			86
Definition of “Material Adverse Effect”			88
Conduct of Business Pending the Merger			89
Obligations to Call Stockholders’ Meeting			93
Obligations to Recommend the Adoption of the Merger Agreement			94
No Solicitation			94
Reasonable Best Efforts Covenant			97
Proxy Statement/Prospectus and Registration Statement Covenant			99
Indemnification and Insurance			99
Employee Matters			100
Tax Matters			101
Other Agreements			102
Termination of the Merger Agreement			103
Exclusive Remedy			104
Other Expenses			105

 

ii

Specific Performance; Remedies			105
Third Party Beneficiaries			105
Amendments; Waivers			105
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			106
INTERESTS OF PIONEER’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER			109
Positions with ExxonMobil Following the Merger			109
Indemnification and Insurance			109
Annual Compensation of Pioneer Directors			109
2023 Annual Cash Bonuses of Executive Officers			109
Treatment of Pioneer Equity Awards in the Merger			110
Change in Control Agreements			113
Pioneer Non-Qualified Deferred Compensation Plan			115
Agreements with ExxonMobil Following the Merger			115
Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers			115
PROPOSAL I—ADOPTION OF THE MERGER AGREEMENT			118
PROPOSAL II—NON-BINDING ADVISORY VOTE ON TRANSACTION-RELATED COMPENSATION FOR CERTAIN PIONEER EXECUTIVE OFFICERS			119
DESCRIPTION OF EXXONMOBIL CAPITAL STOCK			120
Authorized Capital Stock			120
Description of Common Stock			120
Description of Preferred Stock			120
Transfer Agent and Registrar			121
COMPARISON OF STOCKHOLDER RIGHTS			122
EXPERTS			144
LEGAL MATTERS			145
FUTURE PIONEER STOCKHOLDER PROPOSALS			145
WHERE YOU CAN FIND MORE INFORMATION			146
Annex A Agreement and Plan of Merger			A-1
Annex B Opinion of Goldman Sachs & Co. LLC			B-1

 

iii

QUESTIONS AND ANSWERS

The following are some questions that you, as a stockholder of Pioneer, may have regarding the Merger and other matters being considered at the special meeting of Pioneer stockholders (the “Special Meeting”) and brief answers to those questions. To better understand these matters, and for a description of the legal terms governing the Merger, Pioneer urges you to carefully read the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Merger and the other matters being considered at the Special Meeting. Additional important information is also contained in the annexes to this proxy statement/prospectus and the documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

Q: Why am I receiving this document?

A: Exxon Mobil Corporation, a New Jersey corporation (“ExxonMobil”), SPQR, LLC, a Delaware limited liability company and a wholly owned subsidiary of ExxonMobil (“Merger Sub”), and Pioneer Natural Resources Company, a Delaware corporation (“Pioneer”), have entered into an Agreement and Plan of Merger, dated as of October 10, 2023 (as it may be amended from time to time, the “Merger Agreement”), providing for the merger of Merger Sub with and into Pioneer (the “Merger”), with Pioneer surviving the Merger as a wholly owned subsidiary of ExxonMobil. In order to complete the Merger, Pioneer stockholders must approve the proposal to adopt the Merger Agreement and all other conditions to the Merger must be satisfied or waived.

Pioneer will hold the Special Meeting to obtain approval of the Merger Agreement Proposal and approvals with respect to certain other related matters. This proxy statement/prospectus, which you should read carefully, contains important information about the Merger and other matters being considered at the Special Meeting.

This document is being delivered to you as both a proxy statement of Pioneer and a prospectus of ExxonMobil in connection with the Merger. It is the proxy statement by which the Pioneer board of directors (the “Pioneer board”) is soliciting proxies from Pioneer stockholders to vote at the Special Meeting, or at any adjournment or postponement of the Special Meeting, on the approval of the Merger Agreement Proposal and the approval of the Advisory Compensation Proposal, each as described more fully herein. In addition, this document is the prospectus by which ExxonMobil will issue shares of ExxonMobil common stock to Pioneer stockholders in the Merger in accordance with the Merger Agreement.

Your vote is important regardless of the amount of shares of Pioneer common stock that you own. We encourage you to vote as soon as possible.

Q: What is the purpose of the Special Meeting?

A: At the Special Meeting, holders of Pioneer common stock will act upon all the matters outlined in the Notice of Special Meeting of Stockholders. These include:

 

1.

a proposal to adopt the Merger Agreement (the “Merger Agreement Proposal”); and

 

2.

a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Pioneer’s named executive officers that is based on or otherwise related to the Merger (the “Advisory Compensation Proposal”).

Q: What is a proxy and how does it work?

A: The Pioneer board is asking for your proxy. A “proxy” is your legal designation of another person to vote the stock you own in the manner you direct. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. By giving your proxy to the persons named as proxy holders in

 

1

the proxy card accompanying this proxy statement/prospectus, you authorize them to vote your shares of Pioneer common stock at the Special Meeting in the manner you direct. You may cast votes “FOR,” “AGAINST” or “ABSTAIN” with respect to both, either or neither of the matters we are submitting to a vote of holders of Pioneer common stock at the Special Meeting.

If you complete and submit your proxy in one of the manners described below, but do not specify how to vote, the proxy holders will vote your shares “FOR” each of the proposals described below.

Q: What will Pioneer stockholders receive for their shares of Pioneer common stock in the Merger?

A: At the effective time of the Merger (the “effective time”), each share of Pioneer common stock issued and outstanding immediately prior to the effective time (including the unvested restricted stock of Pioneer, but excluding shares of Pioneer common stock held (1) in treasury (excluding Pioneer common stock subject to or issuable in connection with a Pioneer employee benefit plan) or (2) by ExxonMobil or Merger Sub, which are to be cancelled at the effective time (collectively, the “excluded shares”)) will be converted into the right to receive 2.3234 shares of ExxonMobil common stock (the “share consideration”). No fractional shares of ExxonMobil common stock will be delivered to any holder of shares of Pioneer common stock upon completion of the Merger. Instead, all fractional shares of ExxonMobil common stock that a holder of shares of Pioneer common stock would otherwise be entitled to receive as a result of the Merger will be aggregated and, if a fractional share results from such aggregation, such holder will be entitled to receive the cash proceeds from the sale of such fractional share by the exchange agent for the account of such holder (together with the share consideration, the “Merger Consideration”), without interest and subject to any applicable withholding taxes, in accordance with the Merger Agreement.

Although the number of shares of ExxonMobil common stock that Pioneer stockholders will receive in the Merger is fixed, the market value of the Merger Consideration will fluctuate with the market price of ExxonMobil common stock and will not be known at the time that holders of Pioneer common stock vote to adopt the Merger Agreement. Based on the closing price of ExxonMobil’s common stock on the New York Stock Exchange (“NYSE”) on October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions, the 2.3234 exchange ratio represented approximately $253.23 in implied value for each share of Pioneer common stock. Based on ExxonMobil’s closing price on January 5, 2024 of $102.63, the 2.3234 exchange ratio represented approximately $238.45 in implied value for each share of Pioneer common stock. The market price of ExxonMobil common stock when Pioneer stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of shares of ExxonMobil common stock on the date of this proxy statement/prospectus or at the time of the Special Meeting.

Q: If I am a holder of Pioneer common stock, how will I receive the Merger Consideration to which I am entitled?

A: The conversion of Pioneer common stock into the right to receive the Merger Consideration will occur automatically upon the completion of the Merger. Promptly after the effective time and in any event within five business days of the completion of the Merger, an exchange agent will mail to each holder of record of Pioneer common stock (whose shares were converted into the right to receive the Merger Consideration pursuant to the Merger Agreement) a letter of transmittal and instructions for use in effecting the surrender of certificates representing shares of Pioneer common stock (“Certificates”) and book-entry shares representing shares of Pioneer common stock (“Uncertificated Shares”) in exchange for the Merger Consideration and any dividends or other distributions to which such Certificates or Uncertificated Shares become entitled to pursuant to the Merger Agreement.

Upon receipt by the exchange agent of (i) either Certificates or Uncertificated Shares and (ii) a duly completed and validly executed letter of transmittal, and such other documents as may be required pursuant to

 

2

the instructions in the letter of transmittal and otherwise by the exchange agent, the holder of such Certificates or Uncertificated Shares will be entitled to receive the Merger Consideration in exchange therefor.

Q: Who will own ExxonMobil common stock immediately following the transactions?

A: ExxonMobil and Pioneer estimate that, as of immediately following completion of the Merger and without giving effect to any ExxonMobil share repurchases after the date of this proxy statement/prospectus, holders of ExxonMobil common stock as of immediately prior to the Merger will hold approximately 88% and holders of Pioneer common stock as of immediately prior to the Merger will hold approximately 12% of the outstanding shares of ExxonMobil common stock on a fully diluted basis.

Q: How important is my vote?

A: Your vote “FOR” each proposal presented at the Special Meeting is very important regardless of the number of shares of Pioneer common stock that you own, and you are encouraged to submit a proxy or proxies as soon as possible.

Q: What vote is required to approve each proposal at the Special Meeting?

A: Approval of the Merger Agreement Proposal requires the affirmative vote of holders of a majority in voting power of the outstanding shares of Pioneer common stock entitled to vote on the Merger Agreement Proposal. Any abstention by a holder of Pioneer common stock or the failure of any holder of Pioneer common stock to submit a vote will have the same effect as voting “AGAINST” the Merger Agreement Proposal.

Approval of the Advisory Compensation Proposal requires the affirmative vote of the majority of the voting power present (via the Pioneer meeting website) or represented by proxy and entitled to vote on such proposal. Abstentions from voting by a Pioneer stockholder attending the Special Meeting via the Pioneer meeting website or voting by proxy will have the same effect as a vote “AGAINST” the Advisory Compensation Proposal. A failure to attend the Special Meeting via the Pioneer meeting website or by proxy will have no effect on the outcome of the vote on the Advisory Compensation Proposal. Because the Advisory Compensation Proposal is non-binding, if the Merger Agreement is adopted by Pioneer stockholders and the Merger is completed, the compensation that is the subject of the Advisory Compensation Proposal, including amounts Pioneer is contractually obligated to pay, would still be paid regardless of the outcome of the non-binding advisory vote.

See “The Pioneer Special Meeting—Vote Required” beginning on page 46 of this proxy statement/prospectus.

Q: How does the Pioneer board recommend that I vote?

A: At a meeting held on October 10, 2023, the Pioneer board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of Pioneer and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, in accordance with the requirements of the DGCL and (iii) resolved to recommend adoption of the Merger Agreement by the stockholders of Pioneer.

Accordingly, the Pioneer board unanimously recommends that holders of Pioneer common stock vote “FOR” the Merger Agreement Proposal and “FOR” the Advisory Compensation Proposal.

Q: Are there any Pioneer stockholders who have already committed to voting in favor of the Merger Agreement Proposal at the Special Meeting?

A: On January 5, 2024, Pioneer’s directors and executive officers had the right to vote approximately 1.4 million shares of the then-outstanding Pioneer common stock, collectively representing approximately 0.6% of the

 

3

Pioneer common stock outstanding and entitled to vote on that date. We currently expect that Pioneer’s directors and executive officers will vote their shares “FOR” the Merger Agreement Proposal and “FOR” the Advisory Compensation Proposal, although no director or executive officer has entered into any agreement obligating him or her to do so.

Q: Will the ExxonMobil common stock received at the time of completion of the Merger be traded on an exchange?

A: Yes. It is a condition to the consummation of the Merger that the shares of ExxonMobil common stock to be issued to Pioneer stockholders in connection with the Merger be authorized for listing on the NYSE, subject to official notice of issuance.

Q: How will ExxonMobil shareholders be affected by the Merger?

A: Upon completion of the Merger, each ExxonMobil shareholder will hold the same number of shares of ExxonMobil stock that such shareholder held immediately prior to completion of the Merger. As a result of the Merger, ExxonMobil shareholders will own shares in a larger consolidated company with more assets. However, because ExxonMobil will be issuing additional shares of ExxonMobil common stock to Pioneer stockholders in exchange for their shares of Pioneer common stock in connection with the Merger, each outstanding share of ExxonMobil common stock, as of immediately prior to the Merger, will represent a smaller percentage of the aggregate number of shares of ExxonMobil common stock outstanding after the Merger.

Q: What are the U.S. federal income tax consequences of the Merger to holders of Pioneer common stock?

A: The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and ExxonMobil and Pioneer intend to report the Merger consistent with such qualification. Each of ExxonMobil and Pioneer has agreed in the Merger Agreement to use its best efforts (i) to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) not to, and not to permit or cause any of its respective subsidiaries or affiliates to, take or cause to be taken, or fail to take or cause to be taken any action, which action, failure or cessation, could reasonably be expected to cause the Merger to fail to or cease to qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes. Exxon has received from Davis Polk & Wardwell LLP (“Davis Polk”), legal counsel to ExxonMobil, and Pioneer has received from Gibson, Dunn, & Crutcher LLP (“Gibson Dunn”), legal counsel to Pioneer, an opinion to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. These opinions of counsel are based on customary assumptions and representations, covenants and undertakings of ExxonMobil, Pioneer and Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or otherwise is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Merger could differ materially from those described in this proxy statement/prospectus. The receipt of a tax opinion from counsel is not a condition to either party’s obligation to complete the Merger. ExxonMobil and Pioneer have not sought, and do not intend to seek, any ruling from the U.S. Internal Revenue Service (the “IRS”) regarding the qualification of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code. As a result, there can be no assurance that the IRS will agree with the opinions or would not assert, or that a court would not sustain, a position contrary to the treatment of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, U.S. holders (as defined in “U.S. Federal Income Tax Consequences of the Merger”) generally will not recognize gain or loss for U.S. federal income tax purposes, except with respect to cash proceeds from the sale of fractional shares of ExxonMobil common stock. If the Merger does not qualify as a “reorganization,” the Merger generally would be a taxable transaction to U.S. holders, and each U.S. holder generally would recognize gain or loss in an amount equal to the difference, if any, between (i) the sum of the fair market value of the ExxonMobil common stock it receives in the Merger plus the amount of any cash proceeds from the sale of fractional shares of ExxonMobil common stock and (ii) such holder’s adjusted tax basis in its shares of Pioneer common stock exchanged in the Merger.

 

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The U.S. federal income tax consequences described above may not apply to all holders of Pioneer common stock. You should read “U.S. Federal Income Tax Consequences of the Merger” beginning on page 106 of this proxy statement/prospectus for a more complete discussion of the U.S. federal income tax consequences of the Merger. Tax matters can be complicated and the tax consequences of the Merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the Merger to you.

Q: When do ExxonMobil and Pioneer expect to complete the Merger?

A: ExxonMobil and Pioneer currently expect to complete the Merger in the first half of 2024, subject to timing of satisfaction of closing conditions to the Merger. However, neither ExxonMobil nor Pioneer can predict the actual date on which the Merger will be completed, nor can the parties provide any assurance that the Merger will be completed. See “Risk Factors,” “The Merger—Regulatory Approvals Required for the Merger” and “The Merger Agreement—Conditions to Completion of the Merger” beginning on pages 30, 75, and 85, respectively, of this proxy statement/prospectus.

Q: Is the completion of the Merger subject to any conditions?

A: Yes. ExxonMobil, Merger Sub and Pioneer are not required to complete the Merger unless certain conditions are satisfied (or, to the extent permitted by applicable law, waived). These conditions include, among others, the adoption of the Merger Agreement by holders of a majority of Pioneer common stock and the expiration or termination of any applicable waiting period, or any extension thereof, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (in the case of ExxonMobil’s obligation to complete the Merger, without the imposition of a Burdensome Condition (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus)). For a more complete summary of the conditions that must be satisfied (or, to the extent permitted by applicable law, waived) prior to completion of the Merger, see “The Merger Agreement—Conditions to Completion of the Merger” and “The Merger—Regulatory Approvals Required for the Merger” beginning on pages 85 and 75, respectively, of this proxy statement/prospectus.

Q: What happens if the Merger is not completed?

A: In the event that the Merger Agreement is not adopted by Pioneer’s stockholders at the Special Meeting or the Merger is not completed for any other reason, Pioneer’s stockholders will not receive any consideration for shares of Pioneer stock they own. Instead, Pioneer will remain an independent public company, Pioneer common stock will continue to be listed and traded on the NYSE and registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Pioneer will continue to file periodic reports with the Securities and Exchange Commission (the “SEC”) on account of Pioneer’s common stock. If the Merger is not completed for any reason, including as a result of Pioneer stockholders failing to approve the Merger Agreement Proposal, the ongoing businesses of Pioneer may be adversely affected, and the anticipated benefits of having completed the Merger will not be realized. See “Risk Factors—Failure to complete the Merger could negatively impact the stock price and the future business and financial results of Pioneer” beginning on page 37 of this proxy statement/prospectus.

Under specified circumstances, Pioneer may be required to pay a termination fee upon termination of the Merger Agreement, as described under “The Merger Agreement—Termination of the Merger Agreement” beginning on page 103 of this proxy statement/prospectus.

Q: When and where is the Special Meeting?

A: The Special Meeting will be a virtual only meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/PXD2024SM starting at 8:00 am Central Time (with log-in beginning at

 

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7:45 am Central Time) on February 7, 2024. You will be able to attend the Special Meeting and vote your shares electronically during the meeting by going to www.virtualshareholdermeeting.com/PXD2024SM and entering the 16-digit control number included on the proxy card or voting instruction form that you received. Because the Special Meeting is completely virtual and being conducted via live webcast, stockholders will not be able to attend the meeting in person.

Q: Who can vote at, and what is the record date of, the Special Meeting?

A: All Pioneer stockholders who hold shares of Pioneer common stock of record at the close of business on January 5, 2024, the record date for the Special Meeting (the “Pioneer record date”), are entitled to receive notice of, and to vote, at the Special Meeting.

Q: How many votes may I cast?

A: Each issued and outstanding share of Pioneer common stock entitles its holder of record to one vote on each matter to be considered at the Special Meeting. The Pioneer stockholders of record on the Pioneer record date are the only Pioneer stockholders that are entitled to receive notice of, and to vote at, the Special Meeting or any adjournments or postponements thereof.

Q: What constitutes a quorum at the Special Meeting?

A: In order for business to be conducted at the Special Meeting, a quorum must be present. A quorum at the Special Meeting requires the presence of the holders of a majority of the total issued and outstanding shares of Pioneer common stock entitled to vote, present virtually or represented by proxy, at the Special Meeting.

For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which will include proxies received but marked as abstentions and will exclude broker non-votes. Broker non-votes occur when a beneficial owner holding shares in “street name” does not instruct the broker, bank or other nominee that is the record owner of such stockholder’s shares on how to vote those shares on a particular proposal.

Q: What do I need to do now?

A: After you have carefully read and considered the information contained in or incorporated by reference into this proxy statement/prospectus, please submit your proxy via the internet or by telephone in accordance with the instructions set forth on the enclosed proxy card or voting instruction form you received, or complete, sign, date and return the enclosed proxy card or voting instruction form in the self-addressed, stamped envelope provided as soon as possible so that your shares will be represented and voted at the Special Meeting.

Additional information on voting procedures can be found under “The Pioneer Special Meeting” beginning on page 43 of this proxy statement/prospectus.

Q: How will my proxy be voted?

A: If you submit your proxy via the internet, by telephone or by completing, signing, dating and returning the enclosed proxy card or voting instruction form, your proxy will be voted in accordance with your instructions. If you sign your proxy card and return it without indicating how you would like to vote your shares, your proxy card will be voted in accordance with the recommendation of the Pioneer board.

Additional information on voting procedures can be found under “The Pioneer Special Meeting” beginning on page 43 of this proxy statement/prospectus.

 

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Q: Who will count the votes?

A: The votes at the Special Meeting will be counted by an individual designated by the Pioneer board to serve as inspector of election.

Q: How do I vote my shares if I am a stockholder of record?

A: Pioneer stockholders of record at the close of business on January 5, 2024 may vote in one of the following ways:

 

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Internet: Pioneer stockholders of record may submit their proxy over the internet at www.proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 10:59 p.m., Central Time, on February 6, 2024. Stockholders will be given an opportunity to confirm that their voting instructions have been properly recorded. Pioneer stockholders who submit a proxy this way need not send in their proxy card.

 

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Telephone: Pioneer stockholders of record may submit their proxy by calling 1-800-690-6903. Telephone voting is available 24 hours a day and will be accessible until 10:59 p.m., Central Time, on February 6, 2024. Easy-to-follow voice prompts will guide stockholders through the voting and allow them to confirm that their instructions have been properly recorded. Pioneer stockholders who submit a proxy this way need not send in their proxy card.

 

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Mail: Pioneer stockholders of record may submit their proxy by properly completing, signing, dating and mailing their proxy card or voting instruction form in the self-addressed, stamped envelope (if mailed in the United States) included with this proxy statement/prospectus. Pioneer stockholders who vote this way should mail the proxy card early enough so that it is received prior to the closing of the polls at the Special Meeting.

 

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Online During the Virtual Meeting: Pioneer stockholders of record may attend the virtual Special Meeting by entering his, her or its unique 16-digit control number and vote online; attendance at the virtual Special Meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.

If you are a beneficial holder of Pioneer common stock, you are invited to attend the Special Meeting; however, because you are not a stockholder of record, you may not vote your shares at the Special Meeting unless you receive a voting instruction form with a 16-digit control number from your bank, broker or other nominee that is the stockholder of record with respect to your shares of Pioneer common stock.

Q: How can I vote during the Special Meeting?

A: All stockholders of record may vote online during the Special Meeting. Street name holders may vote online during the Special Meeting if they have a voting instruction form with a 16-digit control number, as described below. You may cast your vote electronically during the Special Meeting using the 16-digit control number found on your proxy card or voting instruction form. If you do not have a control number, please contact your broker, bank or other nominee as soon as possible so that you can be provided with a control number.

Whether you plan to attend the Special Meeting or not, we encourage you to vote by proxy as soon as possible.

Q: How can I submit a question at the Special Meeting?

A: Stockholders attending the Special Meeting will be in a listen-only mode and will not be able to speak during the webcast. However, stockholders will be able to submit any questions by the close of business on February 6, 2024 in advance of the Special Meeting by visiting www.proxyvote.com.

Q: Who do I contact if I am encountering difficulties attending the Special Meeting online?

A: If you encounter any difficulties during the check-in process or during the Special Meeting, please call 844-986-0822 (U.S.) and 303-562-9302 (International), and a technician will be ready to assist you starting at

 

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7:45 am Central Time and until the Special Meeting has finished. Please give yourself sufficient time to log-in and ensure you can hear the streaming audio before the meeting starts.

Q: What should I do if I receive more than one set of voting materials for the Special Meeting?

A: You may receive more than one set of voting materials for the Special Meeting, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold your shares of Pioneer common stock in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record of Pioneer common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please submit each separate proxy or voting instruction form that you receive by following the instructions set forth in each separate proxy or voting instruction form. If you fail to submit each separate proxy or voting instruction form that you receive, not all of your shares will be voted.

Q: What’s the difference between holding shares as a stockholder of record and holding shares as a beneficial owner?

A: If your shares of Pioneer common stock are registered directly in your name with Pioneer’s transfer agent, Continental Stock Transfer & Trust Company, you are considered, with respect to those shares, to be the stockholder of record. If you are a stockholder of record, then this proxy statement/prospectus and your proxy card have been sent directly to you by Pioneer.

If your shares of Pioneer common stock are held through a bank, broker or other nominee, you are considered the beneficial owner of shares of Pioneer common stock held in “street name.” In that case, this proxy statement/prospectus has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting, and you are also invited to attend the Special Meeting. But, because you are not the stockholder of record, you may not vote your shares at the Special Meeting unless you receive a voting instruction form with a 16-digit control number from your bank, broker or other nominee.

Q: If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote my shares for me?

A: No. If your shares are held in the name of a broker, bank or other nominee, you will receive separate instructions from your broker, bank or other nominee describing how to vote your shares. The availability of the Internet or telephonic voting will depend on your broker’s, bank’s or other nominee’s voting process. Please check with your broker, bank or other nominee and follow the voting procedures provided by your broker, bank or other nominee on your voting instruction form.

You should instruct your broker, bank or other nominee how to vote your shares. Under the rules applicable to broker-dealers, your broker, bank or other nominee has discretionary authority to vote on proposals that are considered routine but does not have discretionary authority to vote your shares on proposals that are considered non-routine, and each of the proposals to be voted on at the Special Meeting is considered non-routine. As a result, no broker will be permitted to vote your shares at the Special Meeting without receiving instructions from you. A so-called “broker non-vote” results when banks, brokers and other nominees return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares.

Therefore, if you are a Pioneer stockholder whose shares of common stock are held in street name and you do not instruct your broker, bank or other nominee on how to vote your shares:

 

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your broker, bank or other nominee may not vote your shares on the Merger Agreement Proposal, which will have the same effect as a vote “AGAINST” such proposal; and

 

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your broker, bank or other nominee may not vote your shares on the Advisory Compensation Proposal, which will have no effect on the vote count for such proposal.

A quorum at the Special Meeting requires the presence of the holders of a majority of the total issued and outstanding shares of Pioneer common stock entitled to vote, present virtually or represented by proxy, at the Special Meeting. For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which will include proxies received but marked as abstentions and will exclude broker non-votes.

Additional information on voting procedures can be found under “The Pioneer Special Meeting” beginning on page 43 of this proxy statement/prospectus.

Q: What do I do if I am a Pioneer stockholder and I want to revoke my proxy?

A: Pioneer stockholders of record may revoke their proxies at any time before their shares of Pioneer common stock are voted at the Special Meeting in any of the following ways:

 

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delivering written notice of revocation of the proxy to Pioneer’s corporate secretary at Pioneer’s principal executive offices at 777 Hidden Ridge, Irving, Texas 75038, by no later than 10:59 p.m. Central Time on February 6, 2024;

 

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delivering another proxy with a later date to Pioneer’s corporate secretary at Pioneer’s principal executive offices at 777 Hidden Ridge, Irving, Texas 75038, by no later than 10:59 p.m. Central Time February 6, 2024 (in which case only the later-dated proxy is counted and the earlier proxy is revoked);

 

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submitting another proxy again via the internet or by telephone at a later date, by no later than 10:59 p.m. Central Time on February 6, 2024 (in which case only the later-dated proxy is counted and the earlier proxy is revoked); or

 

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attending the Special Meeting virtually, using his, her or its unique 16-digit control number and voting their shares online during the meeting; attendance at the virtual Special Meeting will not, in and of itself, revoke a valid proxy that was previously delivered unless you give written notice of revocation to the Pioneer corporate secretary before the proxy is exercised or unless you vote your shares online during the Special Meeting.

If a Pioneer stockholder holds shares through a bank, broker or other nominee, such stockholder may change or revoke his, her or its voting instructions before the Special Meeting by providing instructions again through the means specified on his, her or its voting instruction form (with most having the option to do so by internet, telephone or mail), which must be received before 10:59 p.m. Central Time on February 6, 2024. Alternatively, a Pioneer stockholder may also revoke their proxy by attending the Special Meeting virtually, using his, her or its unique 16-digit control number and voting his, her or its shares online during the meeting.

Additional information can be found under “The Pioneer Special Meeting” beginning on page 43 of this proxy statement/prospectus.

Q: What happens if I sell or otherwise transfer my shares of Pioneer common stock before the Special Meeting?

A: The Pioneer record date is prior to the date of the Special Meeting. If you sell or otherwise transfer your shares of Pioneer common stock after the Pioneer record date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your shares of Pioneer common stock, you will retain your right to vote such shares at the Special Meeting but will otherwise transfer ownership of and the economic interest in your shares of Pioneer common stock.

 

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Q: What happens if I sell or otherwise transfer my shares of Pioneer common stock before the completion of the Merger?

A: Only holders of shares of Pioneer common stock at the effective time will become entitled to receive the Merger Consideration. If you sell your shares of Pioneer common stock prior to the completion of the Merger, you will not be entitled to receive the Merger Consideration by virtue of the Merger.

Q: Do any of the officers or directors of Pioneer have interests in the Merger that may differ from or be in addition to my interests as a Pioneer stockholder?

A: In considering the recommendation of the Pioneer board that Pioneer stockholders vote to approve the Merger Agreement Proposal and to approve the Advisory Compensation Proposal, Pioneer stockholders should be aware that Pioneer’s directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of Pioneer stockholders generally. These interests may include, among others:

 

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agreement by ExxonMobil to appoint certain Pioneer directors to the ExxonMobil board of directors (the “ExxonMobil board”);

 

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payment to Pioneer’s non-employee directors of full annual cash retainers for the service year in which the Merger occurs;

 

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the treatment of outstanding equity awards described in the section entitled “The Merger Agreement—Treatment and Quantification of Pioneer Equity Awards” beginning on page 83 of this proxy statement/prospectus;

 

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potential severance payments and benefits to Pioneer executive officers under change in control agreements;

 

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funding of the 2023 annual cash bonus pool at maximum performance level and payment of those bonuses in December 2023;

 

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vesting of Pioneer performance units granted in 2021 at maximum performance level and accelerated settlement of such awards into December 2023;

 

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accelerated vesting and settlement in December 2023 of certain Pioneer RSUs and Pioneer Restricted Stock awards held by certain Pioneer executive officers which would have otherwise vested prior to or in connection with the Merger;

 

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payment of each Pioneer executive officer’s non-qualified deferred compensation plan account balance; and

 

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continued indemnification and directors’ and officers’ liability insurance.

The Pioneer board was aware of and considered these potential interests, among other matters, in evaluating and negotiating the Merger Agreement and the transactions contemplated thereby, in approving the Merger and in recommending the adoption of the Merger Agreement and the approval of the Advisory Compensation Proposal.

For more information and quantification of these interests, see “Interests of Pioneer’s Directors and Executive Officers in the Merger” beginning on page 109 of this proxy statement/prospectus.

Q: Where can I find voting results of the Special Meeting?

A: Pioneer intends to announce preliminary voting results at the Special Meeting and publish the final results in a Current Report on Form 8-K that will be filed with the SEC following the Special Meeting. All reports that Pioneer and ExxonMobil file with the SEC are publicly available when filed. See “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

 

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Q: Do Pioneer stockholders have dissenters’ or appraisal rights?

A: Pioneer stockholders are not entitled to dissenters’ or appraisal rights in connection with the Merger. See “The Merger—No Dissenters’ or Appraisal Rights” beginning on page 77 of this proxy statement/prospectus.

Q: How can I find more information about ExxonMobil and Pioneer?

A: You can find more information about ExxonMobil and Pioneer from various sources described in “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

Q: Who can answer any questions I may have about the Special Meeting, the Merger or the transactions contemplated by the Merger Agreement?

A: If you have any questions about the Special Meeting, the Merger or the other transactions contemplated by the Merger Agreement or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or documents incorporated by reference herein, the enclosed proxy card or voting instructions, you should contact Pioneer or Pioneer’s proxy solicitor:

Pioneer Natural Resources Company

777 Hidden Ridge

Irving, Texas 75038

Attention: Investor Relations

(972) 969-4019

or

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call toll free: (800) 322-2995

Email: proxy@mackenziepartners.com

 

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

MARKET PRICES

The following table sets forth the closing price per share of ExxonMobil common stock and per share of Pioneer common stock as reported on the NYSE on October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions, October 10, 2023, the last trading day prior to the public announcement of the Merger on October 11, 2023, and on January 5, 2024, the most recent practicable trading day prior to the date of this proxy statement/prospectus for which this information was available. The table also shows the implied value of the Merger Consideration for each share of Pioneer common stock as of the same dates. This implied value was calculated by multiplying the closing price of a share of ExxonMobil common stock on the relevant date by the exchange ratio.

 

		ExxonMobil Common Stock				Pioneer Common Stock				Implied Per Share Value of Merger Consideration
October 5, 2023		$	108.99			$	214.96			$	253.23
October 10, 2023		$	110.45			$	237.41			$	256.62
January 5, 2024		$	102.63			$	230.08			$	238.45

The market prices of shares of ExxonMobil common stock and Pioneer common stock have fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the Special Meeting and the date the Merger is completed. No assurance can be given concerning the market prices of shares of ExxonMobil common stock and shares of Pioneer common stock before completion of the Merger or shares of ExxonMobil common stock after completion of the Merger. The exchange ratio is fixed in the Merger Agreement, but the market price of shares of ExxonMobil common stock (and therefore the value of the Merger Consideration) when received by Pioneer stockholders after the Merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, Pioneer stockholders are advised to obtain current market quotations for shares of ExxonMobil common stock and shares of Pioneer common stock in deciding whether to vote for adoption of the Merger Agreement.

DIVIDENDS

ExxonMobil currently pays a quarterly dividend on shares of ExxonMobil common stock and last paid a quarterly dividend on December 11, 2023 of $0.95 per share. Pioneer currently pays quarterly base and variable dividends on shares of Pioneer common stock and last paid quarterly base and variable dividends on December 22, 2023 of $1.25 per share and $1.95 per share, respectively. After the date of the Merger Agreement and until the effective time of the Merger, each of ExxonMobil and Pioneer will coordinate with the other party regarding the timing of any declaration of any dividends in respect of ExxonMobil common stock and Pioneer common stock and the record dates and payment dates relating thereto, it being the agreement of the parties that holders of Pioneer common stock will not receive, for any quarter, dividends both in respect of Pioneer common stock and also dividends in respect of ExxonMobil common stock that they receive in exchange therefor in the Merger, but that they shall receive for any such quarter either: (a) only dividends in respect of Pioneer common stock or (b) only dividends in respect of ExxonMobil common stock that they receive in exchange therefor in the Merger. If Pioneer has declared and set a record date for a dividend permitted by the Merger Agreement, and the effective time of the Merger occurs after the record date for such dividend and prior to the payment date for such dividend, then (i) Pioneer will deposit the funds necessary to pay such dividend with the exchange agent prior to the effective time of the Merger and (ii) ExxonMobil will cause the Surviving Corporation to pay such dividend (and any applicable dividend equivalent rights to the extent any holder of a Pioneer equity award was entitled to such rights under the terms of a Pioneer equity award as in effect on the date Pioneer declared the applicable dividend) following the completion of the Merger on the scheduled payment date for such dividend.

 

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Pioneer is permitted under the Merger Agreement to make (x) quarterly cash dividends with a customary record date prior to December 31, 2023 in compliance with Pioneer’s dividend policy that is publicly disclosed prior to the date of the Merger Agreement (the “Pioneer Dividend Policy”), provided that, for purposes of this clause (x), the base component of such dividend will not exceed $1.25 per share of Pioneer common stock and the variable component of such dividend will be 75% of the amount thereof calculated in compliance with the Pioneer Dividend Policy, (y) quarterly cash dividends by Pioneer with a customary record date after December 31, 2023 and prior to April 1, 2024 in compliance with the Pioneer Dividend Policy or, if the completion of the Merger is to occur in the first quarter of 2024 but prior to such customary record date, a quarterly cash dividend by Pioneer with a record date prior to the completion of the Merger in an amount up to the amount that would have been declared and paid in compliance with the Pioneer Dividend Policy on the customary record and payment dates thereof had such completion of the Merger not occurred, which, to the extent required, may be calculated based on estimates of free cash flow of Pioneer prepared by Pioneer in good faith and in accordance with the Pioneer Dividend Policy, provided that, for purposes of this clause (y), the base component of such dividend shall not exceed $1.25 per share of Pioneer common stock and the variable component of such dividend shall be 50% of the amount thereof calculated in compliance with the Pioneer Dividend Policy, and (z) quarterly cash dividends by Pioneer with a customary record date on or after April 1, 2024 in amount not to exceed $1.25 per share of Pioneer common stock. For more information, see “The Merger Agreement—Conduct of Business Pending the Merger” beginning on page 89 of this proxy statement/prospectus.

After completion of the Merger, any former Pioneer stockholder who holds ExxonMobil common shares into which shares of Pioneer common stock have been converted in connection with the Merger will receive whatever dividends are declared and paid on ExxonMobil common shares. However, no dividend or other distribution having a record date after completion of the Merger will actually be paid with respect to any shares of ExxonMobil common stock into which shares of Pioneer common stock have been converted in connection with the Merger until the certificates formerly representing shares of Pioneer common stock have been surrendered (or the book-entry shares formerly representing shares of Pioneer common stock have been transferred), at which time any accrued dividends and other distributions on those shares of ExxonMobil common stock with a payment date prior to such date will be paid without interest. Subject to the limitations set forth in the Merger Agreement, any future dividends by ExxonMobil will be made at the discretion of the ExxonMobil board. Subject to the limitations set forth in the Merger Agreement, any future dividends by Pioneer will be made at the discretion of the Pioneer board. There can be no assurance that any future dividends will be declared or paid by ExxonMobil or Pioneer or as to the amount or timing of those dividends, if any.

 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 40 of this proxy statement/prospectus, the following risk factors should be considered carefully in determining whether to vote for the adoption of the Merger Agreement. You should also read and consider the risk factors associated with each of the businesses of ExxonMobil and Pioneer because these risk factors may affect the operations and financial results of the combined company. These risk factors may be found under Part I, Item 1A, “Risk Factors” in each of ExxonMobil’s and Pioneer’s Annual Reports on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 22, 2023 and February 23, 2023, respectively, Item 1.01, “Entry into a Material Definitive Agreement” in ExxonMobil’s Current Report on Form 8-K filed with the SEC on October 11, 2023, Item 7.01 “Regulation FD Disclosure” in Pioneer’s Current Report on Form 8-K filed with the SEC on October 11, 2023 (SEC Accession No. 0001193125-23-254221), Item 1.01 “Entry into a Material Definitive Agreement” in Pioneer’s Current Report on Form 8-K filed with the SEC on October 11, 2023 (SEC Accession No. 0001193125-23-253935), and in ExxonMobil’s and Pioneer’s subsequent filings with the SEC, in each case, which are incorporated by reference into this proxy statement/prospectus. For information on where you can obtain copies of this information, see “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

Risks relating to the Merger

Because the exchange ratio is fixed and the market price of ExxonMobil common stock has fluctuated and will continue to fluctuate, Pioneer stockholders cannot be sure of the value of the consideration they will receive in the Merger, if completed.

If the Merger is completed, each share of Pioneer common stock outstanding immediately prior to the Merger (except for the excluded shares) will automatically be converted into the right to receive 2.3234 shares of ExxonMobil common stock, with any cash proceeds from the sale of fractional shares. Because the exchange ratio is fixed, the value of the Merger Consideration will depend on the market price of ExxonMobil common stock at the time the Merger is completed. Prior to the completion of the Merger, the market price of ExxonMobil common stock is also expected to impact the market price of the Pioneer common stock. The value of the Merger Consideration has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the Special Meeting and the date the Merger is completed and thereafter. The closing price per share of Pioneer common stock as of October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions, was $214.96, and the closing price per share has fluctuated as high as $251.87 and as low as $212.05 between October 5, 2023 and January 5, 2024, the most recent practicable trading day prior to the date of this proxy statement/prospectus. The closing price per share of ExxonMobil common stock as of October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions, was $108.99, and the closing price per share has fluctuated as high as $112.00 and as low as $98.05 between October 5, 2023 and January 5, 2024, the most recent practicable trading day prior to the date of this proxy statement/prospectus. Accordingly, at the time of the Special Meeting, Pioneer stockholders will not know or be able to determine the market value of the Merger Consideration they would receive upon completion of the Merger. Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in ExxonMobil’s and Pioneer’s respective businesses, operations and prospects, market assessments of the likelihood that the Merger will be completed, the timing of the Merger, regulatory considerations and COVID-19. Many of these factors are beyond ExxonMobil’s and Pioneer’s control. You are urged to obtain current market quotations for each of ExxonMobil’s and Pioneer’s common stock traded on the NYSE (trading symbols “XOM” and “PXD”, respectively).

 

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The market price of ExxonMobil common stock after the Merger may be affected by factors different from those affecting the market price of Pioneer common stock.

Upon completion of the Merger, holders of shares of Pioneer common stock will become holders of shares of ExxonMobil common stock. The businesses of ExxonMobil differ from those of Pioneer in important respects, and, accordingly, the results of operations of ExxonMobil after the Merger, as well as the market price of ExxonMobil common stock, may be affected by factors different from those currently affecting the results of operations of Pioneer. For further information on the respective businesses of ExxonMobil and Pioneer and certain factors to consider in connection with those businesses, see the documents incorporated by reference into this proxy statement/prospectus and referred to in “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

Additionally, the market price of ExxonMobil common stock may fluctuate significantly following completion of the Merger. In addition, ExxonMobil has historically paid quarterly dividends. There is no guarantee that ExxonMobil will continue to do so.

Moreover, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, the ExxonMobil common stock, regardless of ExxonMobil’s actual operating performance.

After completion of the Merger, ExxonMobil may fail to realize the anticipated benefits of the Merger.

If ExxonMobil is not able to successfully combine the businesses of ExxonMobil and Pioneer within the anticipated time frame, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected, the combined business may not perform as expected and the value of the ExxonMobil common shares (including the Merger Consideration) may be adversely affected.

ExxonMobil and Pioneer have operated and, until completion of the Merger, will continue to operate, independently, and there can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Pioneer expertise, the loss of clients, the disruption of either company’s or both companies’ ongoing businesses or in unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of ExxonMobil and Pioneer in order to realize the anticipated benefits of the Merger so the combined business performs as expected:

 

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integrating the companies’ physical assets and technologies;

 

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coordinating sales, distribution and marketing efforts;

 

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integrating and achieving anticipated synergies of the combined business;

 

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succeeding in applying ExxonMobil’s technologies to Pioneer’s assets;

 

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harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

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maintaining existing agreements with commercial counterparties and avoiding delays in entering into new agreements with prospective commercial counterparties;

 

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identifying and eliminating redundant and underperforming functions and assets;

 

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combining certain of the companies’ operations, financial, reporting and corporate functions;

 

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addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

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consolidating the companies’ administrative and information technology infrastructure;

 

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•

managing the movement of certain businesses and positions to different locations;

 

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coordinating geographically dispersed organizations;

 

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consolidating offices of ExxonMobil and Pioneer that are currently in or near the same location; and

 

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effecting potential actions that may be required in connection with obtaining regulatory approvals.

In addition, at times, the attention of certain members of either company’s or both companies’ business or management and resources may be focused on completion of the Merger and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and the business of the combined company.

Pioneer may have difficulty attracting motivating and retaining employees in light of the Merger.

Uncertainty about the effect of the Merger on Pioneer employees may impair Pioneer’s ability to attract, retain and motivate personnel prior to and following the Merger. Employee retention may be particularly challenging during the pendency of the Merger, as employees of Pioneer may experience uncertainty about their future roles with the combined business. In addition, pursuant to change-in-control provisions set forth in Pioneer’s employee plans, certain employees of Pioneer are entitled to receive severance payments upon a constructive termination of employment. Such Pioneer employees potentially could terminate their employment following specified circumstances set forth in Pioneer’s employee plans, including certain changes in such employees’ position, compensation or benefits, and collect severance. Such circumstances could occur in connection with the Merger as a result of changes in roles and responsibilities. See “Interests of Pioneer’s Directors and Executive Officers in the Merger” beginning on page 109 of this proxy statement/prospectus for a further discussion of some of these issues. If employees of Pioneer depart, the integration of the companies may be more difficult and the combined business following the Merger may be harmed. Furthermore, ExxonMobil may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the businesses of ExxonMobil or Pioneer, and ExxonMobil’s ability to realize the anticipated benefits of the Merger may be adversely affected. In addition, there could otherwise be disruptions to or distractions for the workforce and management associated with integrating employees into ExxonMobil.

Completion of the Merger is subject to certain conditions and if these conditions are not satisfied, waived or fulfilled in a timely manner, the Merger may be delayed or not completed.

The obligation of each of ExxonMobil, Pioneer and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of a number of conditions, including, among others: (i) the affirmative vote of the holders of a majority of the shares of Pioneer common stock outstanding and entitled to vote at the Special Meeting adopting the Merger Agreement, (ii) the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act (in the case of ExxonMobil and Merger Sub’s obligation to complete the Merger, without the imposition of a Burdensome Condition (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus for the definition of Burdensome Condition)), (iii) absence of any injunction or other order or applicable law preventing or making illegal the consummation of the Merger (in the case of ExxonMobil and Merger Sub’s obligation to complete the Merger, without the imposition of a Burdensome Condition to the extent such law or prohibition relates to the matters in clause (i) above (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus)), (iv) the registration statement of which this proxy statement/prospectus is a part being declared effective and no stop order suspending the effectiveness of such registration statement being in effect and no proceedings for such purpose pending or threatened by the SEC, (v) approval for the listing on the NYSE of the shares of ExxonMobil common stock to be issued in connection with the Merger, subject to official notice of issuance, (vi) accuracy of the representations and warranties made in the Merger Agreement by, in the case of ExxonMobil and Merger Sub’s

 

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obligations to complete the Merger, Pioneer and, in the case of Pioneer’s obligation to complete the Merger, ExxonMobil and Merger Sub, in each case, as of the date of the Merger Agreement and as of the date of completion of the Merger, subject to certain materiality thresholds, (vii) performance in all material respects by, in the case of ExxonMobil and Merger Sub’s obligations to complete the Merger, Pioneer and, in the case of Pioneer’s obligation to complete the Merger, ExxonMobil and Merger Sub, of the obligations required to be performed by it at or prior to the effective time of the Merger, (viii) the absence since the date of the Merger Agreement of a material adverse effect on, in the case of ExxonMobil and Merger Sub’s obligations to complete the Merger, Pioneer (see “The Merger Agreement—Definition of ‘Material Adverse Effect’” beginning on page 88, of this proxy statement/prospectus for the definition of material adverse effect) and (ix) the absence since the date of the Merger Agreement of a material adverse effect on, in the case of Pioneer’s obligations to complete the Merger, ExxonMobil and Merger Sub.

For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 85 of this proxy statement/prospectus.

Many of the conditions to completion of the Merger are not within either Pioneer’s or ExxonMobil’s control, and neither company can predict when, or if, these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to October 10, 2024 (the “End Date”) (or April 10, 2025, if the End Date is extended in accordance with the terms of the Merger Agreement), it is possible that the Merger Agreement may be terminated. Although Pioneer and ExxonMobil have agreed in the Merger Agreement to use reasonable best efforts, subject to certain limitations, to complete the Merger as promptly as practicable, these and other conditions to the completion of the Merger may fail to be satisfied. In addition, satisfying the conditions to and completion of the Merger may take longer, and could cost more, than Pioneer and ExxonMobil expect.

Furthermore, the requirements for obtaining the required clearances and approvals could delay the completion of the Merger for a significant period of time or prevent the Merger from occurring. Any delay in completing the Merger may adversely affect the cost savings and other benefits that Pioneer and ExxonMobil expect to achieve if the Merger and the integration of the companies’ respective businesses are not completed within the expected time frame.

There can be no assurance that the conditions to the closing of the Merger will be satisfied, waived or fulfilled in a timely fashion or that the Merger will be completed. See “Risk Factors—Failure to complete the Merger could negatively impact the stock price and the future business and financial results of Pioneer” beginning on page 37 of this proxy statement/prospectus.

In order to complete the Merger, ExxonMobil and Pioneer must make certain governmental filings and obtain certain governmental authorizations, and if such filings and authorizations are not made or granted or are granted with conditions to the parties, the closing of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.

The closing of the Merger is conditioned upon the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act. Although ExxonMobil and Pioneer have agreed in the Merger Agreement to use their reasonable best efforts, subject to specified limitations on remedies required to be accepted by ExxonMobil, to make certain governmental filings or obtain the required governmental authorizations, as the case may be, there can be no assurance that the relevant waiting periods will expire or that the relevant authorizations will be obtained. In addition, the governmental authorities with or from which these authorizations are required have broad discretion in administering the governing regulations. Adverse developments in ExxonMobil’s or Pioneer’s regulatory standing or any other factors considered by regulators in granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally could affect whether and when required governmental authorizations are granted. As a condition to authorization of the Merger, governmental authorities

 

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may impose requirements, limitations or costs or place restrictions on the conduct of ExxonMobil’s business after completion of the Merger. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying the closing of the Merger or imposing additional material costs on or materially limiting the revenues of the combined company following the Merger, or otherwise adversely affecting ExxonMobil’s businesses and results of operations after completion of the Merger. In addition, there can be no assurance that these terms, obligations or restrictions will not result in the delay or abandonment of the Merger. See “The Merger Agreement—Conditions to Completion of the Merger” and “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on pages 85 and 97, respectively, of this proxy statement/prospectus.

If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the Pioneer stockholders may be required to pay substantial U.S. federal income taxes.

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and ExxonMobil and Pioneer intend to report the Merger consistent with such qualification. Exxon has received from Davis Polk, and Pioneer has received from Gibson Dunn, an opinion to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. These opinions of counsel are based on customary assumptions and representations, covenants and undertakings of ExxonMobil, Pioneer and Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or otherwise is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Merger could differ materially from those described in this proxy statement/prospectus. It is not a condition to Pioneer’s or ExxonMobil’s obligation to complete the Merger that the Merger be treated as a “reorganization” within the meaning of Section 368(a) of the Code or that ExxonMobil or Pioneer receive an opinion from counsel to that effect. ExxonMobil and Pioneer have not sought, and will not seek any ruling from the IRS regarding any matters relating to the transactions, and as a result, there can be no assurance that the IRS will agree with the opinions or would not assert, or that a court would not sustain, a position contrary to the treatment of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code. If the IRS or a court determines that the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a holder of Pioneer common stock generally would recognize taxable gain or loss upon the exchange of Pioneer common stock for ExxonMobil common stock pursuant to the Merger. See “U.S. Federal Income Tax Consequences of the Merger” beginning on page 106 of this proxy statement/prospectus.

The financial forecasts are based on various assumptions that may not be realized.

The financial estimates set forth in the forecasts included under the section “The Merger—Certain Pioneer Unaudited Prospective Financial Information” were based on assumptions of, and information available to, Pioneer’s management, when prepared, and these estimates and assumptions are subject to uncertainties, many of which are beyond Pioneer’s control and may not be realized. Many factors mentioned in this proxy statement/prospectus, including the risks outlined in this “Risk Factors” section and the events or circumstances described under “Cautionary Statement Regarding Forward-Looking Statements,” will be important in determining the combined company’s future results. As a result of these contingencies, actual future results may vary materially from Pioneer’s estimates. In view of these uncertainties, the inclusion of financial estimates in this proxy statement/prospectus is not and should not be viewed as a representation that the forecasted results will necessarily reflect actual future results.

Pioneer’s financial estimates were not prepared with a view toward public disclosure, and such financial estimates were not prepared with a view toward compliance with published guidelines of any regulatory or professional body. Further, any forward-looking statement speaks only as of the date on which it is made, and Pioneer does not undertake any obligation, other than as required by applicable law, to update the financial estimates herein to reflect events or circumstances after the date those financial estimates were prepared or to reflect the occurrence of anticipated or unanticipated events or circumstances.

 

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The financial estimates of Pioneer included in this proxy statement/prospectus have been prepared by, and are the responsibility of, Pioneer. Moreover, neither Pioneer’s independent accountants nor any other independent accountants, have compiled, examined or performed any procedures with respect to Pioneer’s prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or achievability thereof, and, accordingly, such independent accountants assume no responsibility for, and disclaim any association with, Pioneer’s prospective financial information. The reports of such independent accountants incorporated by reference herein relate exclusively to the historical financial information of the entities named in those reports and do not cover any other information in this proxy statement/prospectus and should not be read to do so. See “The Merger—Certain Pioneer Unaudited Prospective Financial Information” beginning on page 65 for more information.

The opinion of Pioneer’s financial advisor will not reflect changes in circumstances between the signing of the Merger Agreement and the completion of the Merger.

Pioneer has received an opinion from its financial advisor in connection with the signing of the Merger Agreement, but has not obtained any updated opinion from its financial advisor as of the date of this proxy statement/prospectus. Changes in the operations and prospects of ExxonMobil or Pioneer, general market and economic conditions and other factors that may be beyond the control of ExxonMobil or Pioneer, and on which Pioneer’s financial advisor’s opinion was based, may significantly alter the value of ExxonMobil or Pioneer or the prices of the shares of ExxonMobil common stock or Pioneer common stock by the time the Merger is completed. The opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. Because Pioneer does not currently anticipate asking its financial advisor to update its opinion, the opinion will not address the fairness of the Merger Consideration from a financial point of view at the time the Merger is completed. The Pioneer board’s recommendation that Pioneer stockholders vote “FOR” approval of the Merger Agreement Proposal and “FOR” the Advisory Compensation Proposal, however, is made as of the date of this proxy statement/prospectus.

For a description of the opinion that Pioneer received from its financial advisor, see the section entitled “The Merger—Opinion of Pioneer’s Financial Advisor” beginning on page 67. A copy of the opinion of Goldman Sachs, Pioneer’s financial advisor, is attached as Annex B to this proxy statement/prospectus.

ExxonMobil’s and Pioneer’s business relationships may be subject to disruption due to uncertainty associated with the Merger.

Parties with which ExxonMobil or Pioneer does business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with ExxonMobil, Pioneer or the combined business. ExxonMobil’s and Pioneer’s business relationships may be subject to disruption as parties with which ExxonMobil or Pioneer does business may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than ExxonMobil, Pioneer or the combined business. These disruptions could have an adverse effect on the businesses, financial condition, results of operations or prospects of the combined business, including an adverse effect on ExxonMobil’s ability to realize the anticipated benefits of the Merger. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.

Pioneer may waive one or more of the closing conditions without re-soliciting stockholder approval.

Pioneer may determine to waive, in whole or part, one or more of the conditions to closing prior to Pioneer being obligated to consummate the Merger. Any determination whether to waive any conditions to closing, or to re-solicit stockholder approval to amend or supplement this proxy statement/prospectus as a result of such a waiver, will be made by Pioneer at the time of such waiver based on the facts and circumstances as they exist at that time.

 

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Completion of the Merger may trigger change in control or other provisions in certain agreements to which Pioneer is a party.

Pioneer is a party to certain agreements that give the counterparty certain rights following a “change in control,” including in some cases the right to terminate such agreements. Under some such agreements, the Merger may constitute a change in control and therefore the counterparty may exercise certain rights under the agreement upon the closing of the Merger. Any such counterparty may request modifications of its respective agreements as a condition to granting a waiver or consent under its agreement. There is no assurance that such counterparties will not exercise their rights under the agreements, including termination rights where available and/or requiring payment of substantial financial penalties.

Pioneer’s executive officers and directors have interests in the Merger that may be different from, or in addition to, your interests as a stockholder of Pioneer or as a shareholder of ExxonMobil.

In considering the recommendation of the Pioneer board to vote for the adoption of the Merger Agreement, Pioneer stockholders should be aware that the directors and executive officers of Pioneer have interests in the Merger that may be different from, or in addition to, the interests of Pioneer stockholders generally, including accelerated vesting of equity awards and potential severance payments. The Pioneer board was aware of these interests and considered them, among other matters, in evaluating and negotiating the Merger Agreement and approving the Merger, and in making its recommendation that Pioneer stockholders vote to adopt the Merger Agreement.

For more information, see “Interests of Pioneer’s Directors and Executive Officers in the Merger” beginning on page 109 of this proxy statement/prospectus.

The Merger Agreement limits Pioneer’s ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire Pioneer for greater consideration than what ExxonMobil has agreed to pay pursuant to the Merger Agreement.

The Merger Agreement contains provisions that make it more difficult for Pioneer to sell its business to a party other than ExxonMobil. These provisions include a general prohibition on Pioneer soliciting any Acquisition Proposal or offer for a competing transaction. Further, subject to certain exceptions, the Pioneer board will not withdraw or modify in a manner adverse to ExxonMobil the recommendation of the Pioneer board in favor of the adoption of the Merger Agreement, and ExxonMobil generally has a right to match any competing Acquisition Proposals that may be made. Notwithstanding the foregoing, at any time prior to the adoption of the Merger Agreement by Pioneer stockholders, the Pioneer board is permitted to withdraw or modify in a manner adverse to ExxonMobil the recommendation of the Pioneer board in favor of the adoption of the Merger Agreement in certain circumstances if it determines in good faith that the failure to take such action would reasonably likely be inconsistent with its fiduciary duties to Pioneer stockholders under applicable law. The Merger Agreement does not require that Pioneer submit the adoption of the Merger Agreement to a vote of Pioneer stockholders if the Pioneer board terminates the Merger Agreement in order to enter into an alternative acquisition agreement with respect to a competing transaction in accordance with the terms of the Merger Agreement. In certain circumstances, upon termination of the Merger Agreement, Pioneer will be required to pay a termination fee of $1.815 billion to ExxonMobil, including if Pioneer terminates the Merger Agreement prior to obtaining Pioneer stockholder approval in order to enter into an alternative acquisition agreement with respect to a competing transaction in accordance with the terms of the Merger Agreement. See “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Exclusive Remedy” beginning on pages 103 and 104, respectively, of this proxy statement/prospectus.

While both Pioneer and ExxonMobil believe these provisions and agreements are reasonable and customary and are not preclusive of other offers, the restrictions, including the added expense of the $1.815 billion termination fee that may become payable by Pioneer to ExxonMobil in certain circumstances, might discourage a third party that has an interest in acquiring all or a significant part of Pioneer from considering or proposing that

 

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acquisition, even if that party were prepared to pay consideration with a higher per-share value than the consideration payable in the Merger pursuant to the Merger Agreement.

Failure to complete the Merger could negatively impact the stock price and the future business and financial results of Pioneer.

If the Merger is not completed for any reason, including as a result of Pioneer stockholders failing to adopt the Merger Agreement or any other condition not being satisfied or waived, the ongoing businesses of Pioneer may be adversely affected, and, without realizing any of the benefits of having completed the Merger, ExxonMobil and Pioneer would be subject to a number of risks, including the following:

 

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Pioneer may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

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Pioneer may experience negative reactions from its customers, vendors, joint venture and other business partners, regulators and employees;

 

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Pioneer will be required to pay certain costs relating to the Merger, such as legal, accounting, financial advisor and printing fees, whether or not the Merger is completed;

 

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the Merger Agreement places certain restrictions on the conduct of Pioneer’s businesses prior to completion of the Merger, and such restrictions, the waiver of which is subject to the written consent of ExxonMobil (such consent not to be unreasonably withheld, conditioned or delayed), and subject to certain exceptions and qualifications, may prevent Pioneer from taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the Merger that Pioneer would have made, taken or pursued if these restrictions were not in place (see “The Merger Agreement—Conduct of Business Pending the Merger” beginning on page 89 of this proxy statement/prospectus for a description of the restrictive covenants applicable to Pioneer);

 

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matters relating to the Merger (including integration planning) will require substantial commitments of time and resources by Pioneer management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to Pioneer as an independent company;

 

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in the event of a termination of the Merger Agreement under certain circumstances specified in the Merger Agreement, Pioneer may be required to pay a termination fee of $1.815 billion to ExxonMobil; to the extent that a termination fee is not promptly paid by Pioneer when due, Pioneer will be required to pay ExxonMobil interest on such fee at the annual rate equal to the prime rate, as published in The Wall Street Journal in effect on the date such payment was required to be made, through the date such payment was actually received, or such lesser rate as is the maximum permitted by applicable law; and

 

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litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against Pioneer or ExxonMobil preventing the performance of their respective obligations pursuant to the Merger Agreement.

There can be no assurance that the risks described above will not materialize. If the Merger is not completed, these risks may materialize and may materially and adversely affect Pioneer’s businesses, financial condition, financial results, ratings, stock prices and/or bond prices.

The shares of ExxonMobil common stock to be received by Pioneer stockholders upon completion of the Merger will have different rights from shares of Pioneer common stock.

Upon completion of the Merger, Pioneer stockholders will no longer be stockholders of Pioneer, a Delaware corporation, but will instead become stockholders of ExxonMobil, a New Jersey corporation, and their rights as stockholders will be governed by New Jersey law and ExxonMobil’s restated certificate of incorporation and

 

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by-laws. New Jersey law and the terms of ExxonMobil’s restated certificate of incorporation and by-laws may be materially different than Delaware law and the terms of the Pioneer certificate of incorporation and bylaws, which currently govern the rights of Pioneer stockholders. See “Comparison of Stockholder Rights” beginning on page 122 of this proxy statement/prospectus for a discussion of the different rights associated with ExxonMobil common shares.

After the Merger, Pioneer stockholders, as a group, will have a significantly lower ownership and voting interest in ExxonMobil than they currently have in Pioneer and will exercise less influence over management.

Based on the number of shares of Pioneer common stock and the Pioneer equity awards outstanding as of the Pioneer record date, ExxonMobil estimates that it will issue approximately 545,245,356 shares of ExxonMobil common stock pursuant to the Merger, provided that if additional Pioneer equity awards are granted to certain Pioneer employees as permitted under the Merger Agreement, ExxonMobil may be required to reserve additional shares of ExxonMobil common stock for issuance (see “The Merger Agreement—Treatment and Quantification of Pioneer Equity Awards”). The actual number of shares of ExxonMobil common stock to be issued and reserved for issuance in connection with the Merger will be determined at completion of the Merger based on the exchange ratio and the number of shares of Pioneer common stock and the Pioneer equity awards outstanding at that time. ExxonMobil has a significantly larger market capitalization than Pioneer. Based on the number of shares of Pioneer common stock outstanding as of January 5, 2024, and the number of shares of ExxonMobil common stock outstanding as of January 5, 2024, ExxonMobil and Pioneer estimate that, as of immediately following completion of the Merger, holders of ExxonMobil common stock as of immediately prior to the Merger will hold approximately 88% and holders of Pioneer common stock as of immediately prior to the Merger will hold approximately 12%, of the outstanding shares of ExxonMobil common stock on a fully diluted basis. Consequently, former Pioneer stockholders, as a group, will have materially less influence over the management and policies of ExxonMobil than they currently have over the management and policies of Pioneer.

Pioneer stockholders are not entitled to appraisal rights in connection with the Merger.

Appraisal rights are statutory rights that enable stockholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the applicable transaction. Under Delaware law, holders of shares of Pioneer common stock will not have rights to an appraisal of the fair value of their shares in connection with the Merger. See “The Merger—No Dissenters’ or Appraisal Rights” beginning on page 77 of this proxy statement/prospectus.

Potential litigation against ExxonMobil and Pioneer could result in substantial costs, an injunction preventing the completion of the Merger and/or a judgment resulting in the payment of damages.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such lawsuits are unsuccessful, defending against them can result in substantial costs.

Since the public announcement of the Merger, two putative stockholder lawsuits related to the Merger have been filed and Pioneer has received letters from additional purported Pioneer stockholders who contend that the registration statement on Form S-4 of which this proxy statement/prospectus forms a part fails to disclose certain allegedly material information. For additional information, see the section entitled “The Merger—Litigation Relating to the Merger.” These lawsuits could prevent or delay the completion of the Merger and result in significant costs to Pioneer and/or ExxonMobil, including any costs associated with the indemnification of directors and officers. There can be no assurance that any of the defendants will be successful in the outcome of these lawsuits or any other potential lawsuits.

 

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ExxonMobil and Pioneer will incur significant transaction and Merger-related costs in connection with the Merger.

ExxonMobil and Pioneer expect to incur a number of non-recurring costs associated with the Merger and combining the operations of the two companies. The significant, non-recurring costs associated with the Merger include, among others, fees and expenses of financial, legal, accounting and other advisors and representatives, certain employment-related costs relating to employees of Pioneer (which are described in “Interests of Pioneer’s Directors and Executive Officers in the Merger” beginning on page 109 of this proxy statement/prospectus), filing fees due in connection with filings required under the HSR Act and filing fees and printing and mailing costs for this proxy statement/prospectus. Some of these costs have already been incurred or may be incurred regardless of whether the Merger is completed, including a portion of the fees and expenses of financial advisors and other advisors and representatives and filing fees for this proxy statement/prospectus. ExxonMobil also will incur transaction fees and costs related to formulating and implementing integration plans with respect to the two companies, including facilities and systems consolidation costs. ExxonMobil continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Merger and the integration of the two companies’ businesses.

Risks relating to ExxonMobil and Pioneer.

ExxonMobil and Pioneer are, and following completion of the Merger ExxonMobil will continue to be, subject to the risks described in (i) Part I, Item 1A, “Risk Factors” in ExxonMobil’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 22, 2023 and Item 1.01, “Entry into a Material Definitive Agreement” in ExxonMobil’s Current Report on Form 8-K filed with the SEC on October 11, 2023, (ii) Part I, Item 1A, “Risk Factors” in Pioneer’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023, Item 7.01 “Regulation FD Disclosure” in Pioneer’s Current Report on Form 8-K filed with the SEC on October 11, 2023 (SEC Accession No. 0001193125-23-254221), and Item 1.01 “Entry into a Material Definitive Agreement” in Pioneer’s Current Report on Form 8-K filed with the SEC on October 11, 2023 (SEC Accession No. 0001193125-23-253935), and (iii) ExxonMobil’s and Pioneer’s subsequent filings with the SEC, in each case, which are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus, including the information included or incorporated by reference, contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. In this context, forward-looking statements often address future business and financial events, conditions, expectations, plans or ambitions, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words, but not all forward-looking statements include such words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the Merger and the anticipated benefits thereof. All such forward-looking statements are based upon current plans, estimates, expectations and ambitions that are subject to risks, uncertainties and assumptions, many of which are beyond the control of ExxonMobil and Pioneer, that could cause actual results to differ materially from those expressed in such forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the completion of the Merger on anticipated terms and timing, or at all, including obtaining regulatory approvals that may be required on anticipated terms and Pioneer stockholder approval; anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined company’s operations and other conditions to the completion of the Merger, including the possibility that any of the anticipated benefits of the Merger will not be realized or will not be realized within the expected time period; the ability of ExxonMobil and Pioneer to integrate the business successfully and to achieve anticipated synergies and value creation; potential litigation relating to the Merger that could be instituted against ExxonMobil, Pioneer or their respective directors; the risk that disruptions from the Merger will harm ExxonMobil’s or Pioneer’s business, including current plans and operations and that management’s time and attention will be diverted on transaction-related issues; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; rating agency actions and ExxonMobil and Pioneer’s ability to access short- and long-term debt markets on a timely and affordable basis; legislative, regulatory and economic developments, including regulatory actions targeting public companies in the oil and gas industry and changes in local, national, or international laws, regulations, and policies affecting ExxonMobil and Pioneer including with respect to the environment; potential business uncertainty, including the outcome of commercial negotiations and changes to existing business relationships during the pendency of the Merger that could affect ExxonMobil’s and/or Pioneer’s financial performance and operating results; certain restrictions during the pendency of the Merger that may impact Pioneer’s ability to pursue certain business opportunities or strategic transactions or otherwise operate its business; acts of terrorism or outbreak of war, hostilities, civil unrest, attacks against ExxonMobil or Pioneer, and other political or security disturbances; dilution caused by ExxonMobil’s issuance of additional shares of its common stock in connection with the Merger; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in policy and consumer support for emission-reduction products and technology; the impacts of pandemics or other public health crises, including the effects of government responses on people and economies; global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market or economic conditions that impact demand, prices and differentials, including reservoir performance; changes in technical or operating conditions, including unforeseen technical difficulties; those risks described in Item 1A of ExxonMobil’s Annual Report on Form 10-K, filed with the SEC on February 22, 2023, and subsequent reports on Forms 10-Q and 8-K, as well as under the heading “Factors Affecting Future Results” on the Investors page of ExxonMobil’s website at www.exxonmobil.com (information included on or accessible through ExxonMobil’s website is not incorporated by reference into this communication); those risks described in Item 1A of Pioneer’s Annual Report on Form 10-K, filed with the SEC on February 23, 2023, and subsequent reports on Forms 10-Q and 8-K; and those risks that are described herein under “Risk Factors.” References to resources or other quantities of oil or natural gas may include amounts that ExxonMobil or Pioneer believe will ultimately be produced, but that are not yet classified as “proved reserves” under SEC definitions.

 

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While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. You are cautioned not to place undue reliance on ExxonMobil’s and Pioneer’s forward-looking statements, which speak only as of the date of this proxy statement/prospectus or the date of any information included or incorporated by reference in this proxy statement/prospectus. All subsequent written and oral forward-looking statements concerning the Merger or other matters addressed in this proxy statement/prospectus and attributable to ExxonMobil or Pioneer or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, ExxonMobil and Pioneer undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

Actions needed to advance ExxonMobil’s 2030 and 2035 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on ExxonMobil’s Energy Outlook research and publication. The Energy Outlook is reflective of the existing global policy environment, the Energy Outlook does not attempt to project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Energy Outlook, and ExxonMobil’s business plans will be updated accordingly. Actual future results, including the achievement of net zero in ExxonMobil’s Upstream Permian Basin unconventional operated assets by 2030/2035 and plans to lower methane emissions from operated assets, to increase water recycling in ExxonMobil’s combined Permian operations, and to feed hydrogen, ammonia, and carbon capture projects could vary depending on the ability to execute operational objectives on a timely and successful basis; policy support for emission-reduction products and technologies; changes in laws, regulations and international treaties regarding lower emission technologies and projects; government incentives; unforeseen technical or operational difficulties; the outcome of research efforts and future technology developments, including the ability to scale projects, technologies, and markets on a commercially competitive basis; changes in supply and demand and other market factors affecting future prices of oil, gas, and petrochemical products; the actions of competitors; and other factors discussed in this proxy statement/prospectus and in the additional forward looking statement disclaimers included above.

All references to production rates, project capacity, resource size, and acreage are on a gross basis, unless otherwise noted.

 

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THE COMPANIES

EXXON MOBIL CORPORATION

Exxon Mobil Corporation, which is referred to in this proxy statement/prospectus as ExxonMobil, was incorporated in the State of New Jersey in 1882. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Their principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals, and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, and lower-emission fuels. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses.

The principal trading market for ExxonMobil’s common stock (NYSE: XOM) is the NYSE.

The principal executive offices of ExxonMobil are located at 22777 Springwoods Village Parkway, Spring, Texas 77389-1425, its telephone number is (972) 940-6000 and its website is www.exxonmobil.com.

This proxy statement/prospectus incorporates important business and financial information about ExxonMobil from other documents that are not included in or delivered with this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

PIONEER NATURAL RESOURCES COMPANY

Pioneer Natural Resources Company, which is referred to in this proxy statement/prospectus as Pioneer, is a large independent oil and gas exploration and production company that explores for, develops and produces oil, natural gas liquids and gas in the Permian Basin in West Texas.

Pioneer common stock is traded on the NYSE under the symbol “PXD.” Following the Merger, Pioneer common stock will be delisted from the NYSE.

The principal executive offices of Pioneer are located at 777 Hidden Ridge, Irving, Texas, 75038, its telephone number is (972) 444-9001 and its website is www.pxd.com.

Additional information about Pioneer and its subsidiaries are included in documents incorporated by reference into this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

SPQR, LLC

Merger Sub is a wholly owned subsidiary of ExxonMobil. Merger Sub was formed solely for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

Merger Sub was formed in the State of Delaware on October 6, 2023. The principal executive offices of Merger Sub are located at 22777 Springwoods Village Parkway, Spring, Texas 77389-1425, and its telephone number is (972) 940-6000.

 

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THE PIONEER SPECIAL MEETING

General

This proxy statement/prospectus is being provided to Pioneer stockholders as part of a solicitation of proxies by the Pioneer board for use at the Special Meeting and at any adjournments or postponements of such Special Meeting. This proxy statement/prospectus provides Pioneer stockholders with important information about the Special Meeting and should be read carefully in its entirety. In addition, this proxy statement/prospectus constitutes a prospectus for ExxonMobil in connection with the issuance by ExxonMobil of shares of ExxonMobil common stock pursuant to the Merger Agreement.

Date, Time and Place of the Special Meeting

The Special Meeting will be a virtual meeting conducted exclusively via live webcast online at www.virtualshareholdermeeting.com/PXD2024SM starting at 8:00 am Central Time (with log-in beginning at 7:45 am Central Time) on February 7, 2024. Pioneer stockholders will be able to attend the Special Meeting online and vote shares electronically at the meeting by going to www.virtualshareholdermeeting.com/PXD2024SM and entering the 16-digit control number included on the proxy card or voting instruction form you received. Because the Special Meeting is completely virtual and being conducted via live webcast, stockholders will not be able to attend the meeting in person.

Purposes of the Special Meeting

The Special Meeting is being held to consider and vote upon the following proposals:

 

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Proposal 1—the Merger Agreement Proposal: to adopt the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus and the material provisions of which are summarized in “The Merger Agreement” beginning on page 80 of this proxy statement/prospectus, pursuant to which, among other things, Merger Sub will merge with and into Pioneer and each outstanding share of Pioneer common stock will be converted into the right to receive 2.3234 shares of ExxonMobil common stock.

 

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Proposal 2—the Advisory Compensation Proposal: to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Pioneer’s named executive officers that is based on or otherwise related to the Merger, the estimated value of which is disclosed in the table in “Interests of Pioneer’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers” beginning on page 115 of this proxy statement/prospectus.

Recommendation of the Pioneer Board

At a meeting held on October 10, 2023, the Pioneer board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of Pioneer and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, in accordance with the requirements of the DGCL and (iii) resolved to recommend adoption of the Merger Agreement by the stockholders of Pioneer. The Pioneer board unanimously recommends that the Pioneer stockholders vote:

 

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Proposal 1: “FOR” the Merger Agreement Proposal; and

 

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Proposal 2: “FOR” the Advisory Compensation Proposal.

This proxy statement/prospectus contains important information regarding these proposals and factors that Pioneer stockholders should consider when deciding how to cast their votes. Pioneer stockholders are encouraged

 

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to read carefully this proxy statement/prospectus in its entirety, including the annexes to this proxy statement/prospectus and documents incorporated by reference into this proxy statement/prospectus, for more detailed information regarding the Merger Agreement and the Merger.

Voting by Directors and Executive Officers

On January 5, 2024, Pioneer directors and executive officers, as a group, beneficially owned and were entitled to vote 1.4 million shares of Pioneer common stock, or approximately 0.6% of the issued and outstanding shares of Pioneer common stock. Although none of them has entered into any agreement obligating them to do so as a director or executive officer of Pioneer, Pioneer currently expects that all of its directors and executive officers will vote their shares “FOR” Proposal 1 (the Merger Agreement Proposal) and “FOR” Proposal 2 (the Advisory Compensation Proposal).

Attendance at the Special Meeting

Only Pioneer stockholders of record on the Pioneer record date, beneficial owners of Pioneer common stock on the Pioneer record date and holders of valid proxies for the Special Meeting may attend the virtual Special Meeting. Participating stockholders who log-on to the meeting using his, her or its unique 16-digit control number will also be able to examine the stockholder list during the Special Meeting by following the instructions provided on the meeting website.

Submitting Questions for the Virtual Special Meeting

Pioneer stockholders attending the virtual meeting will be in a listen-only mode and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the virtual meeting, stockholders are able submit questions before the meeting at www.proxyvote.com.

Limitations on Submitting Questions for the Virtual Special Meeting

Pioneer will answer questions during the Special Meeting that are relevant to meeting matters, comply with the meeting rules of conduct and have been submitted prior to the start of the Special Meeting, subject to time constraints. However, Pioneer reserves the right to exclude questions that are not pertinent to meeting matters or to edit profanity or other inappropriate language. Each stockholder is limited to a total of one question that must be related to the business of the Special Meeting. Each question should cover only one topic and be as succinct as possible. If Pioneer receives substantially similar questions, Pioneer will group such questions together and provide a single response to avoid repetition. The questions of all Pioneer stockholders are welcome. However, the purpose of the Special Meeting must be observed and questions that are not directly related to the business of Pioneer or are not otherwise in good taste, related to personal grievances or otherwise inappropriate (as determined by the chairman of the meeting) will not be answered.

Record Date

The Pioneer board has fixed the close of business on January 5, 2024 as the Pioneer record date for the determination of the Pioneer stockholders entitled to receive notice of, and to vote at, the Special Meeting. The Pioneer stockholders of record on the Pioneer record date are the only Pioneer stockholders that are entitled to receive notice of, and to vote at, the Special Meeting or any adjournments or postponements of the Special Meeting.

Participants in the Pioneer Natural Resources USA, Inc. 401(k) and Matching Plan

Participants in the Pioneer Natural Resources USA, Inc 401(k) Plan (the “Pioneer 401(k) Plan”) who have shares of Pioneer common stock credited to their plan account as of the Pioneer record date will have the right to direct the Pioneer 401(k) Plan trustee how to vote those shares. The trustee will vote the shares in a participant’s

 

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Pioneer 401(k) Plan account in accordance with the participant’s instructions or, if no instructions are received prior to 10:59 pm Central Time on February 2, 2024, the shares credited to that participant’s account will be voted by the trustee in the same proportion as it votes shares for which it did receive timely instructions. Information as to how participants voted the shares credited to their Pioneer 401(k) Plan account will not be disclosed to Pioneer. If a participant holds Pioneer common stock outside of the Pioneer 401(k) Plan, the participant will need to vote those shares separately.

Outstanding Shares and Voting Rights of Pioneer Stockholders

On the Pioneer record date, there were 233,623,121 shares of Pioneer common stock issued and outstanding, held by 7,828 holders of record. Each issued and outstanding share of Pioneer common stock entitles its holder of record to one vote at the Special Meeting.

Stockholder List

A complete list of registered Pioneer stockholders entitled to vote at the Special Meeting will be available for inspection at Pioneer’s principal executive offices at 777 Hidden Ridge, Irving, Texas 75038, during ordinary business hours, for a period of no less than ten days before the Special Meeting and will be available during the virtual Special Meeting at www.virtualshareholdermeeting.com/PXD2024SM. If a Pioneer stockholder wants to inspect the stockholder list, such stockholder should call the Pioneer corporate secretary at (972) 444-9001 to schedule an appointment or request access.

Quorum; Abstentions and Broker Non-Votes

In order for business to be conducted at the Special Meeting, a quorum must be present. A quorum at the Special Meeting requires the presence of the holders of a majority of the total issued and outstanding shares of Pioneer common stock entitled to vote, present virtually or represented by proxy, at the Special Meeting. An abstention occurs when a stockholder is present for purposes of a quorum by virtually attending the Special Meeting and either does not vote or submits a ballot marked “abstain”. An abstention also occurs when a stockholder does not attend the meeting virtually and instead submits a proxy with an “abstain” instruction. Abstentions will be counted for purposes of determining whether there is a quorum at the Special Meeting. In accordance with the rules of the NYSE, brokers, banks and other nominees who hold shares of Pioneer common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the Merger Agreement Proposal and the Advisory Compensation Proposal. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to these proposals. Under such circumstance, a “broker non-vote” would arise. “Broker non-votes,” if any, will not be considered present at the Special Meeting for purposes of determining whether a quorum is present at the Special Meeting.

Adjournment

If a quorum is not present or represented or if there are not sufficient votes for the approval of the Merger Agreement Proposal and the Advisory Compensation Proposal, Pioneer expects that the Special Meeting will be adjourned by the chairman of the Special Meeting to solicit additional proxies. In addition, the holders of a majority in voting power of Pioneer common stock entitled to vote at the Special Meeting who are present online or by proxy at the Special Meeting have the power to adjourn such meeting, whether or not a quorum is present. No notice of the reconvened meeting is required to be given if the date, time and place (including the means of remote communication) are announced at the Special Meeting unless the reconvened meeting is more than 30 days after the date for which notice was originally given. At any reconvened Special Meeting at which a quorum is present, (i) any business may be transacted that may have been transacted at the Special Meeting had a quorum been present and (ii) all proxies will be voted in the same manner as the manner in which such proxies would have been voted at the original convening of the Special Meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent meeting.

 

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Vote Required

The votes required for each proposal are as follows:

 

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Proposal 1—the Merger Agreement Proposal. The affirmative vote of holders of a majority of the outstanding shares of Pioneer common stock on the Pioneer record date and entitled to vote thereon is required to adopt the Merger Agreement Proposal. The required vote on Proposal 1 is based on the number of outstanding shares—not the number of shares actually voted. The failure of any Pioneer stockholder to submit a vote (i.e., by not submitting a proxy and not voting at the Special Meeting) and any abstention from voting by a Pioneer stockholder will have the same effect as a vote “AGAINST” the Merger Agreement Proposal. Because the Merger Agreement Proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the Merger Agreement Proposal, and will not be able to vote on the Merger Agreement Proposal absent instructions from the beneficial owner of any Pioneer shares held of record by them. As a result, a broker non-vote will have the same effect as a vote “AGAINST” the Merger Agreement Proposal.

 

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Proposal 2—the Advisory Compensation Proposal. The affirmative vote of the majority of the voting power present or represented by proxy at the Special Meeting, where a quorum is present, and entitled to vote thereon is required to approve the Advisory Compensation Proposal. The required vote on the Advisory Compensation Proposal is based on the number of shares present—not the number of outstanding shares. Abstentions from voting by a Pioneer stockholder attending the Special Meeting or voting by proxy will have the same effect as a vote “AGAINST” the Advisory Compensation Proposal. A failure to attend the Special Meeting virtually or by proxy will have no effect on the outcome of the vote on the Advisory Compensation Proposal. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal, and, as a result, broker non-votes will have no effect on the outcome of the vote on the Advisory Compensation Proposal. While the Pioneer board intends to consider the vote resulting from the Advisory Compensation Proposal, the vote is advisory only and therefore not binding on Pioneer, and, if the proposed Merger is approved by Pioneer stockholders and consummated, the compensation that is the subject of the Advisory Compensation Proposal, including amounts Pioneer is contractually obligated to pay, will be payable even if the Advisory Compensation Proposal is not approved.

How to Vote

Pioneer stockholders of record and beneficial owners of Pioneer common stock on the Pioneer record date may vote their shares of Pioneer common stock by submitting a proxy or may vote virtually online at the Special Meeting by following the instructions provided on the proxy card or voting instruction form received. Pioneer recommends that Pioneer stockholders entitled to vote submit a proxy prior to the Special Meeting even if they plan to attend the virtual Special Meeting.

Pioneer stockholders are encouraged to submit a proxy promptly. Each valid proxy received in time will be voted at the Special Meeting according to the choice specified, if any. Executed but uninstructed proxies (i.e., proxies that are properly signed, dated and returned but are not marked to tell the proxies how to vote) will be voted in accordance with the recommendations of the Pioneer board.

Record Holders

Pioneer stockholders of record may vote in one of the following ways:

 

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Internet: Pioneer stockholders of record may submit their proxy over the internet at www.proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 10:59 p.m., Central Time, on February 6, 2024. Stockholders will be given an opportunity to confirm that their voting instructions have been properly recorded. Pioneer stockholders who submit a proxy this way need not send in their proxy card.

 

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•

Telephone: Pioneer stockholders of record may submit their proxy by calling 1-800-690-6903. Telephone voting is available 24 hours a day and will be accessible until 10:59 p.m., Central Time, on February 6, 2024. Easy-to-follow voice prompts will guide stockholders through the voting and allow them to confirm that their instructions have been properly recorded. Pioneer stockholders who submit a proxy this way need not send in their proxy card.

 

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Mail: Pioneer stockholders of record may submit their proxy by properly completing, signing, dating and mailing their proxy card or voting instruction form in the self-addressed, stamped envelope (if mailed in the United States) included with this proxy statement/prospectus. Pioneer stockholders who vote this way should mail the proxy card early enough so that it is received prior to the closing of the polls at the Special Meeting.

 

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Online During the Virtual Meeting: Pioneer stockholders of record may attend the virtual Special Meeting by entering his, her or its unique 16-digit control number and vote online; attendance at the virtual Special Meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.

Beneficial Owners

Pioneer stockholders who hold their shares of Pioneer common stock beneficially in “street name” and wish to submit a proxy must provide instructions to the bank, broker or other nominee that holds their shares of record as to how to vote their shares with respect to the Merger Agreement Proposal and the Advisory Compensation Proposal. Most beneficial owners will have a choice of voting before the Special Meeting by proxy over the internet, by telephone or by using a voting instruction form. Each beneficial owner of Pioneer common stock should refer to the voting instruction form received to see what options are available and how to use them. Pioneer stockholders who hold their shares of Pioneer common stock beneficially and wish to vote virtually at the Special Meeting may do so by attending the special meeting, entering his, her or its unique 16-digit control number and voting their shares electronically; however attendance at the virtual Special Meeting will not, in and of itself, constitute a vote or a revocation of a prior proxy.

In accordance with the rules of the NYSE, brokers, banks and other nominees who hold shares of Pioneer common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the Merger Agreement Proposal and the Advisory Compensation Proposal. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to these proposals. Under such circumstance, a “broker non-vote” would arise. “Broker non-votes,” if any, will not be considered present at the Special Meeting for purposes of determining whether a quorum is present at the Special Meeting, will have the same effect as a vote “AGAINST” the Merger Agreement Proposal and, assuming a quorum is present, will have no effect on the Advisory Compensation Proposal. Thus, for shares of Pioneer common stock held in “street name,” only shares of Pioneer common stock affirmatively voted “FOR” the Merger Agreement Proposal will be counted as a vote in favor of such proposal.

Proxies and Revocation

Pioneer stockholders of record may revoke their proxies at any time before their shares of Pioneer common stock are voted at the Special Meeting in any of the following ways:

 

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delivering written notice of revocation of the proxy to Pioneer’s corporate secretary at Pioneer’s principal executive offices at 777 Hidden Ridge, Irving, Texas 75038, by no later than 10:59 p.m. Central Time on February 6, 2024;

 

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delivering another proxy with a later date to Pioneer’s corporate secretary at Pioneer’s principal executive offices at 777 Hidden Ridge, Irving, Texas 75038, by no later than 10:59 p.m. Central Time on February 6, 2024 (in which case only the later-dated proxy is counted and the earlier proxy is revoked);

 

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•

submitting another proxy again via the internet or by telephone at a later date, by no later than 10:59 p.m. Central Time on February 6, 2024 (in which case only the later-dated proxy is counted and the earlier proxy is revoked); or

 

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attending the Special Meeting virtually, using his, her or its unique 16-digit control number and voting their shares online during the meeting; attendance at the virtual Special Meeting will not, in and of itself, revoke a valid proxy that was previously delivered unless you give written notice of revocation to the Pioneer corporate secretary before the proxy is exercised or unless you vote your shares online during the Special Meeting.

If a Pioneer stockholder holds shares through a bank, broker or other nominee, such stockholder may change or revoke his, her or its voting instructions before the Special Meeting by providing instructions again through the means specified on his, her or its voting instruction form (with most having the option to do so by internet, telephone or mail), which must be received before 10:59 p.m. Central Time on February 6, 2024. Alternatively, a Pioneer stockholder may also revoke their proxy by attending the Special Meeting virtually, using his, her or its unique 16-digit control number and voting his, her or its shares online during the meeting.

Inspector of Elections; Tabulation of Votes

Voting results will be tabulated and certified by an individual designated by the Pioneer board to serve as inspector of election.

Solicitation of Proxies

Pioneer will pay for the proxy solicitation costs related to the Special Meeting. In addition to sending and making available these materials, some of Pioneer’s directors, officers and other employees may solicit proxies by contacting Pioneer stockholders by telephone, by mail, by e-mail or online. Pioneer stockholders may also be solicited by, among others, news releases issued by Pioneer and/or ExxonMobil, postings on Pioneer’s or ExxonMobil’s websites and social media accounts and advertisements in periodicals. None of Pioneer’s directors, officers or employees will receive any extra compensation for their solicitation services. Pioneer has also retained MacKenzie Partners, Inc. as its proxy solicitor to assist in the solicitation of proxies. For these proxy solicitation services, MacKenzie Partners, Inc. will receive an estimated fee of approximately $15,000, plus reasonable out-of-pocket expenses and fees for any additional services. Pioneer will also reimburse banks, brokers, and other nominees for their expenses in sending proxy solicitation materials to the beneficial owners of shares of Pioneer common stock and obtaining their proxies.

Other Matters

At this time, Pioneer knows of no other matters to be submitted at the Special Meeting other than those listed in the notice.

Householding of Proxy Statement/Prospectus

One copy of this proxy statement/prospectus will be sent to stockholders who share an address, unless they have notified Pioneer that they want to continue receiving multiple packages. This practice, known as “householding,” is designed to reduce duplicate mailings and save significant printing and postage costs. If you received a household mailing this year and you would like to have additional copies of this proxy statement/prospectus mailed to you or you would like to opt out of this practice for future mailings, Pioneer will promptly deliver such additional copies to you if you submit your request in writing to Corporate Secretary, Pioneer Natural Resources Company, 777 Hidden Ridge, Irving, Texas 75038, or call (972) 444-9001.

 

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Questions and Additional Information

Pioneer stockholders may contact Pioneer’s proxy solicitor with any questions about the Merger Agreement Proposal and the Advisory Compensation Proposal or how to vote or to request additional copies of any materials at:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call toll free: (800) 322-2995

Email: proxy@mackenziepartners.com

Pioneer stockholders should not return their stock certificates or send documents representing Pioneer common stock with the enclosed proxy card. If the Merger is completed, the exchange agent for the Merger will send to Pioneer stockholders a letter of transmittal and related materials and instructions for exchanging shares of Pioneer common stock.

 

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THE MERGER

GENERAL

This proxy statement/prospectus is being provided to holders of Pioneer common stock in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. At the Special Meeting, Pioneer will ask Pioneer stockholders to consider and vote on (i) the Merger Agreement Proposal and (ii) the Advisory Compensation Proposal.

The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Pioneer, with Pioneer continuing as the Surviving Corporation and a wholly owned subsidiary of ExxonMobil. The Merger will not be completed unless Pioneer stockholders adopt the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus. You are urged to read the Merger Agreement in its entirety because it is the legal document that governs the Merger. For additional information about the Merger, see “The Merger Agreement—Structure of the Merger” and “The Merger Agreement—Merger Consideration” beginning on pages 80 and 81, respectively, of this proxy statement/prospectus.

If the Merger is completed, each outstanding share of Pioneer common stock (with certain exceptions described in this proxy statement/prospectus) will be entitled to the right to receive the Merger Consideration, subject to any applicable withholding taxes for cash proceeds from the sale of fractional shares, in each case without interest. Although the number of shares of ExxonMobil common stock that Pioneer stockholders will receive in the Merger is fixed, the market value of the Merger Consideration will fluctuate with the market price of ExxonMobil common stock and will not be known at the time that Pioneer stockholders vote to adopt the Merger Agreement. Based on the closing price of ExxonMobil’s common stock on the NYSE on October 5, 2023, the last trading day prior to media reports that Pioneer and ExxonMobil were in merger discussions, the 2.3234 exchange ratio represented approximately $253.23 in implied value for each share of Pioneer common stock. Based on ExxonMobil’s closing price on January 5, 2024 of $102.63, the 2.3234 exchange ratio represented approximately $238.45 in implied value for each share of Pioneer common stock. The market price of ExxonMobil common stock when Pioneer stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of shares of ExxonMobil common stock on the date of this proxy statement/prospectus or at the time of the Special Meeting.

THE PARTIES

Exxon Mobil Corporation

Exxon Mobil Corporation, which is referred to in this proxy statement/prospectus as ExxonMobil, was incorporated in the State of New Jersey in 1882. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Their principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals, and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, and lower-emission fuels. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses.

The principal trading market for ExxonMobil’s common stock (NYSE: XOM) is the NYSE.

The principal executive offices of ExxonMobil are located at 22777 Springwoods Village Parkway, Spring, Texas 77389-1425, its telephone number is (972) 940-6000 and its website is www.exxonmobil.com.

This proxy statement/prospectus incorporates important business and financial information about ExxonMobil from other documents that are not included in or delivered with this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

 

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Pioneer Natural Resources Company

Pioneer Natural Resources Company, which is referred to in this proxy statement/prospectus as Pioneer, is a large independent oil and gas exploration and production company that explores for, develops and produces oil, natural gas liquids and gas in the Permian Basin in West Texas.

Pioneer common stock is traded on the NYSE under the symbol “PXD.” Following the Merger, Pioneer common stock will be delisted from the NYSE.

The principal executive offices of Pioneer are located at 777 Hidden Ridge, Irving, Texas, 75038, its telephone number is (972) 444-9001 and its website is www.pxd.com.

Additional information about Pioneer and its subsidiaries are included in documents incorporated by reference into this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 146 of this proxy statement/prospectus.

SPQR, LLC

SPQR, LLC, which is referred to in this proxy statement/prospectus as Merger Sub, is a Delaware limited liability company and a wholly owned subsidiary of ExxonMobil. Merger Sub was formed solely for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

Merger Sub was formed in the State of Delaware on October 6, 2023. The principal executive offices of Merger Sub are located at 22777 Springwoods Village Parkway, Spring, Texas 77389-1425, and its telephone number is (972) 940-6000.

BACKGROUND OF THE MERGER

The terms of the Merger Agreement are the result of arm’s-length negotiations between representatives of ExxonMobil and Pioneer. The following is a summary of the events leading up to the signing of the Merger Agreement and the key meetings, negotiations, discussions and actions by and between ExxonMobil and Pioneer and their respective advisors that preceded the public announcement of the transaction; it does not purport to catalogue every conversation or interaction among representatives of ExxonMobil, Pioneer and other parties.

The Pioneer board and Pioneer senior management regularly review and evaluate Pioneer’s long-term strategic plans and goals, overall industry trends and Pioneer’s operations, future growth opportunities, competitive position and risks in light of current business and economic conditions. As part of such ongoing reviews and evaluations, the Pioneer board and Pioneer senior management regularly discuss likely key drivers of stockholder value creation and positive stock price performance for Pioneer. The Pioneer board noted in these discussions that investors have increasingly favored companies with large market capitalizations that have the ability to maintain strong balance sheets across commodity price cycles, generate free cash flow and return capital to stockholders, either in the form of dividends or share repurchases. In addition, in connection with such ongoing reviews and evaluations, Pioneer senior management engages in discussions with representatives of other exploration and production companies from time to time, and the Pioneer board meets periodically in the ordinary course of business to receive updates from Pioneer senior management on such discussions and to consider and evaluate potential strategic alternatives available to Pioneer, including merger and acquisition transactions. Such discussions and strategic alternatives have included discussions with other publicly traded and private exploration and production companies with respect to acquisition transactions by Pioneer or other business combination transactions. Over the past several years, however, Pioneer has not executed, and has not been requested to execute, any confidentiality or similar agreement or exchanged confidential information with

 

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respect to an acquisition of Pioneer, nor has Pioneer received any proposals containing economic terms for any such acquisition, other than with respect to the proposed transaction.

In recent months, as part of evaluating potential strategic alternatives, Pioneer engaged in discussions with Company A, an upstream company with operations in the Permian basin, regarding the acquisition of Company A by Pioneer. Pioneer and Company A had preliminary discussions with respect to the proposed ownership percentage of Company A’s shareholders in Pioneer, the potential long-term strategy of the combined company and certain structuring, employee and governance matters. No agreement was reached on the ownership split or any other terms of a potential transaction. After considering the status of the discussions, the possible terms that could ultimately be negotiated with Company A, the uncertainty of reaching agreement and potential investor reaction, and taking into account the considerations generally described under “—Recommendation of the Pioneer Board of Directors and Reasons for the Merger,” Pioneer concluded that the transaction with ExxonMobil would be more advantageous to its shareholders than remaining independent and pursuing the acquisition of Company A.

At various times, each of ExxonMobil’s and Pioneer’s general review and evaluation of the potential business combination landscape included an assessment of the other’s businesses and operations. In addition, ExxonMobil and Pioneer are generally familiar with each other, and the companies and their respective representatives have, from time to time over the past several years, engaged in preliminary discussions about potential synergies and the benefits of a strategic transaction between the two companies. No proposals containing economic terms with respect to any such transaction were exchanged in such discussions.

On May 25, 2023, the Pioneer board held its regularly scheduled quarterly meeting. At that meeting, as part of Pioneer’s consideration and evaluation of potential strategic alternatives, representatives of Gibson, Dunn & Crutcher LLP (“Gibson Dunn”), outside counsel to Pioneer, presented materials with respect to the fiduciary duties of the members of the Pioneer board under Delaware law, including in connection with merger and acquisition transactions.

By early June 2023, ExxonMobil believed that it was continuing to demonstrate a growing advantage in recovering resource and the efficiency of its development approach, and therefore the value it could bring to a potential transaction. ExxonMobil also believed that the relative movements in the respective stock prices of ExxonMobil and Pioneer might make a potential transaction attainable. Darren W. Woods, Chairman and Chief Executive Officer of ExxonMobil, therefore arranged a call with Scott D. Sheffield, Chief Executive Officer of Pioneer, and, on June 22, 2023, Messrs. Sheffield and Woods discussed the potential transaction. During the discussion, Mr. Sheffield conveyed the expectation that any potential acquisition of Pioneer would need to be at a significant premium consistent with premiums historically paid in transactions of comparable size. Mr. Sheffield also expressed his belief that commodity prices would continue to increase, and that Pioneer had upside in the Midland basin, which increased Pioneer’s value. Mr. Woods expressed his view that any potential transaction would result in synergies supporting some level of premium and that ExxonMobil would likely offer all-stock consideration in any such transaction. Mr. Woods stated his belief that an all-stock transaction would benefit Pioneer stockholders given his view that a diversified company, like ExxonMobil, would outperform an upstream only company with geographically concentrated assets over the long-term.

On June 28, 2023, the Pioneer board met with members of Pioneer senior management. At the meeting, the Pioneer board discussed, among other things, updates regarding a potential transaction with ExxonMobil.

On August 21, 2023, as part of its regularly scheduled quarterly meetings, the Pioneer board met with members of Pioneer senior management and representatives of Goldman Sachs, Pioneer’s financial advisor, and Gibson Dunn. A representative of Goldman Sachs led a discussion with the Pioneer board, based on public information, regarding merger and acquisition opportunities and analysts’ research perspectives on possible transactions, including with respect to a potential transaction with ExxonMobil, as well as ExxonMobil’s recent management commentary regarding its views on potential acquisition activity.

 

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On September 6, 2023, Messrs. Sheffield and Woods met to further discuss a potential transaction. During the meeting, they discussed the importance of Pioneer employee retention to a successful outcome of the combination, considerations with respect to the location of Pioneer’s headquarters following the closing of the potential transaction and the synergy opportunities available to the combined company given the shared expertise of Pioneer’s and ExxonMobil’s employees. Mr. Sheffield expressed his continued belief that, for the Pioneer board to consider and approve a potential transaction, ExxonMobil would need to offer a meaningful premium over the then-current trading price of Pioneer common stock, noting that he personally would support a transaction reflecting a premium of at least 20% above the “at the market” exchange ratio of 2.14 shares of ExxonMobil common stock for each share of Pioneer common stock implied by the closing prices as of September 5, 2023, but that the Pioneer board had not approved or authorized Mr. Sheffield to discuss any specific premium or range of premiums and he did not know whether the Pioneer board would support a transaction at that premium. Messrs. Sheffield and Woods also discussed Pioneer representation on the ExxonMobil board, the ability of Pioneer to pay dividends between signing and closing and ExxonMobil’s payment of a termination fee in the event antitrust approvals were not obtained. As part of the discussion, Mr. Woods noted that while the ExxonMobil board had yet to authorize a formal proposal to acquire Pioneer, the ExxonMobil board had extensively discussed, and remained interested in pursuing, the potential transaction and that the parties would remain in contact to further discuss key terms.

On September 7, 2023, the Pioneer board met with members of Pioneer senior management and a representative of Gibson Dunn. Mr. Sheffield provided the Pioneer board with an update on his discussion with Mr. Woods on September 6, 2023.

On September 19, 2023, Messrs. Sheffield and Woods discussed the potential transaction. Mr. Woods informed Mr. Sheffield that the ExxonMobil board, including its Finance Committee, had authorized him to make a formal proposal to acquire Pioneer. Mr. Woods then previewed the terms of the proposal, which Mr. Sheffield said he would discuss with the Pioneer board. Following the meeting, ExxonMobil sent a proposal letter on September 19, 2023 (which was dated September 18, 2023), reflecting the terms discussed between Messrs. Woods and Sheffield. The letter proposed an all-stock merger in which each share of Pioneer common stock would be valued at $255, resulting in an exchange ratio of 2.185 shares of ExxonMobil common stock for each share of Pioneer common stock, based on a closing price of $116.70 per share of ExxonMobil common stock on September 15, 2023, reflecting a 9.0% premium over the trading price of Pioneer common stock on the same day. The letter also stated that ExxonMobil would consider one board seat on the ExxonMobil board for a representative of the Pioneer board and provided Pioneer with the ability to return up to 75% of free cash flow to stockholders prior to closing in the form of the current quarterly base dividend (with no further quarterly variable dividends being paid) and share repurchases. The letter recognized that the Pioneer employee base is highly skilled and has been critical to Pioneer’s success and that ExxonMobil would seek to retain most of Pioneer’s employees.

On September 22, 2023, the Pioneer board met with members of Pioneer senior management and representatives of Gibson Dunn, Goldman Sachs and Morgan Stanley & Co. LLC (“Morgan Stanley”), a financial advisor to Pioneer. Morgan Stanley was retained as an additional advisor to Pioneer based on its extensive industry expertise and knowledge of Pioneer, and not by reason of any conflict of interest relating to Goldman Sachs. At the meeting, the Pioneer board discussed the September 18 proposal letter and related matters. Representatives of Goldman Sachs and Morgan Stanley separately discussed presentation materials provided to the Pioneer board with respect to the proposed transaction. In executive session, a representative of Gibson Dunn reviewed the fiduciary duties of the members of the Pioneer board with respect to their evaluation of the proposed transaction. Following discussion, the Pioneer board unanimously rejected ExxonMobil’s proposal in the September 18 letter, but authorized Mr. Sheffield to meet with Mr. Woods to continue discussing a potential transaction.

On September 24, 2023, Messrs. Sheffield and Woods met to discuss the potential transaction. At the meeting, Mr. Sheffield informed Mr. Woods of the Pioneer board’s rejection of the ExxonMobil proposal, but

 

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that the board had authorized Mr. Sheffield to continue discussing the potential transaction with Mr. Woods. Messrs. Sheffield and Woods then discussed several key transaction terms, including the ability of Pioneer to pay its variable dividend between signing and closing, ExxonMobil’s commitment to keeping Pioneer’s Irving, Texas headquarters open for at least two years following the transaction closing date, the treatment of Pioneer employees in connection with the proposed transaction, that two of Pioneer’s directors, including Mr. Sheffield, receive board seats on the ExxonMobil board, ExxonMobil’s payment of a “reverse” termination fee in the event antitrust approvals were not obtained and various due diligence items. Mr. Sheffield also discussed with Mr. Woods matters with respect to the consideration that would potentially be payable in a proposed transaction, including an exchange ratio that would be indicative of a price in the range of $265 to $270 per share of Pioneer common stock, which Mr. Sheffield specified would be subject to Pioneer board approval as part of its evaluation of any proposed transaction, and a pro forma ownership by Pioneer stockholders in ExxonMobil of approximately 11.5% to 12%.

On September 25, 2023, the Pioneer board met with members of Pioneer senior management and a representative of Gibson Dunn. Mr. Sheffield reported on the points discussed in the meeting with Mr. Woods. The Pioneer board discussed the potential transaction and related key terms, including a discussion of the trading multiples of the two companies and integration matters with respect to Pioneer employees. A representative of Gibson Dunn led a discussion with the Pioneer board about the board’s fiduciary duties under Delaware law in connection with the potential transaction.

On September 26, 2023, Mr. Woods called Mr. Sheffield to provide an update on ExxonMobil’s proposal, including that ExxonMobil would be willing to progress the proposed transaction on terms consistent with the preliminary terms discussed at the meeting between Messrs. Sheffield and Woods on September 24, subject to further discussion regarding Pioneer’s ability to pay the variable dividend between signing and closing of the proposed transaction and to the completion of due diligence with respect to the proposed transaction.

Later that day, the Pioneer board met with members of Pioneer senior management and representatives of Goldman Sachs and Gibson Dunn. Mr. Sheffield provided the Pioneer board with an update on his discussion with Mr. Woods earlier that day. The Pioneer board discussed considerations with respect to the exchange ratio, including implied premium and pro forma ownership by Pioneer stockholders, as well as governance and due diligence matters. Representatives of Goldman Sachs led the Pioneer board in a discussion of Goldman Sachs’ materials that had been provided prior to the meeting. Following discussion regarding the proposed terms of the potential transaction, the Pioneer board unanimously authorized Mr. Sheffield to continue negotiations with ExxonMobil and approved Pioneer’s entry into a confidentiality agreement with ExxonMobil.

Also on September 26, 2023, ExxonMobil provided a draft of a mutual confidentiality agreement to Pioneer.

On September 28, 2023, Pioneer and ExxonMobil executed a mutual confidentiality agreement. The agreement included standstill provisions in favor of Pioneer that would terminate if Pioneer agreed to be sold to a third party. It also included an exclusivity agreement requiring Pioneer to negotiate exclusively with ExxonMobil until October 15, 2023.

Later that day, ExxonMobil shared a draft of the Merger Agreement with Pioneer. The draft contemplated, among other things, (a) a merger transaction with all-stock consideration where ExxonMobil would acquire all of the outstanding shares of Pioneer common stock at a fixed exchange ratio in a tax-free transaction qualifying as a “reorganization” within the meaning of Section 368(a)(1)(B) of the Code, (b) the ability of Pioneer to repurchase Pioneer shares and to pay its quarterly base dividend (excluding the variable component of the dividend) between signing and closing so long as the aggregate amounts paid or distributed did not exceed, in the aggregate, 75% of Pioneer’s free cash flow for the applicable fiscal quarter, (c) the ability of Pioneer to terminate the Merger Agreement to enter into a superior proposal, (d) a requirement that ExxonMobil maintain Pioneer’s Irving, Texas headquarters for two years following the closing of the merger, (e) Mr. Sheffield and one other Pioneer outside director selected by ExxonMobil becoming members of the ExxonMobil board at closing, (f) an outside date of

 

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18 months for completion of the transaction and (g) a termination fee, payable by Pioneer in the event the Merger Agreement is terminated in certain situations, of 3.25% of the equity value of the proposed transaction. The draft also expressly provided that, in the event that U.S. antitrust authorities required remedies of ExxonMobil under the HSR Act in order to complete the transaction, ExxonMobil would not be required to divest assets or accept any remedy that would result in a material adverse effect on the business, financial condition or results of operations of ExxonMobil, Pioneer and their respective subsidiaries, taken as a whole and assuming a consolidated entity of the size and scale of a hypothetical company that is 100% of the size of Pioneer and its subsidiaries, taken as a whole. The draft also included an agreement by both parties not to undertake acquisition activity that would prevent, materially hinder or materially delay obtaining regulatory approval of the merger. The draft did not include any termination fee payable by ExxonMobil, including in the event antitrust approvals were not obtained, or any fee or expense reimbursement provision payable by Pioneer in the event Pioneer stockholders failed to adopt the Merger Agreement in the absence of a competing proposal for Pioneer.

Over the next two weeks until the signing of the Merger Agreement on October 10, 2023, ExxonMobil and Pioneer, together with their advisors, engaged in confirmatory due diligence efforts and negotiations with respect to the Merger Agreement.

On September 30, 2023, Messrs. Richard P. Dealy, President, Chief Operating Officer, and CEO-Designate of Pioneer, Mark S. Berg, Executive Vice President, Corporate Operations of Pioneer, Mark H. Kleinman, Executive Vice President and General Counsel of Pioneer, and Christopher M. Paulsen, Senior Vice President of Business Development and Strategy of Pioneer, along with representatives of Gibson Dunn, met with Messrs. Alex V. Volkov, Vice President, Strategy & Business Development of ExxonMobil Upstream Company, Matthew Rasmussen, Managing Counsel of ExxonMobil, Peter Dillon, Business Development Manager of ExxonMobil, Daniel Bates, Finance General Manager of ExxonMobil, and representatives of Davis Polk to further discuss the potential transaction, including the key terms of the Merger Agreement.

On October 2, 2023, representatives of Gibson Dunn sent a revised draft of the Merger Agreement to representatives of Davis Polk, which draft included the following key changes to the draft of the Merger Agreement received from Davis Polk on September 28, 2023: (a) revising the interim operating covenants to provide Pioneer with the ability to continue to pay quarterly base and variable dividends consistent with historic practice and its dividend policy prior to April 1, 2024, and following April 1, 2024, in an amount not to exceed an unspecified amount per share of Pioneer common stock, (b) adding an express obligation to defend and contest any litigation pursued by a governmental agency seeking an injunction prohibiting the merger, but otherwise generally accepting ExxonMobil’s proposed approach to regulatory matters conditioned upon the inclusion of a “reverse” termination fee to Pioneer in the event the Merger Agreement was terminated due to failure to obtain necessary antitrust approvals, (c) revising the governance covenants such that (i) Pioneer’s office in Midland, Texas would also stay in place for two years following the closing of the merger, and (ii) the Pioneer board representatives on the ExxonMobil board, including Mr. Sheffield and one member to be selected by the Pioneer board, would be nominated at the next annual meeting of ExxonMobil following the closing, subject to certain exceptions, (d) revising the termination provisions to include a 12 month end date with an automatic extension of the outside date to 18 months for regulatory approvals and (e) reserving on the amount of the termination fee payable by Pioneer in the event the Merger Agreement is terminated in certain circumstances. The draft also included modifications to the representations and warranties and interim operating covenants of the parties.

On October 4, 2023, the Pioneer board met with members of Pioneer senior management and representatives of Goldman Sachs and Gibson Dunn. At the meeting, Messrs. Berg, Kleinman and Sheffield provided an update on the proposed transaction, the status of the Merger Agreement and related negotiations and the due diligence process. In particular, the Pioneer board discussed the key unresolved issues, including the calculation of the exchange ratio, the ability of Pioneer to pay dividends between signing and closing, the structure of the proposed transaction, termination fees payable by Pioneer and ExxonMobil and the allocation of antitrust risk. Members of the Pioneer board also discussed employee transition and retention matters, as well as

 

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a communication plan with respect to both internal and external communications to Pioneer’s key stakeholders in connection with the proposed transaction. The board also discussed with its advisors antitrust termination fees, if any, payable by acquiring companies in precedent transactions in the energy sector. A representative of Gibson Dunn discussed legal considerations related to actual or potential conflicts of members of the Pioneer board that could arise in connection with the evaluation of the potential transaction.

Also on October 4, 2023, representatives of Gibson Dunn and Davis Polk had a call to discuss the draft Merger Agreement.

Also on October 4, 2023, Goldman Sachs delivered to Pioneer a letter regarding Goldman Sachs’ relationships with ExxonMobil that the Pioneer board did not view as impacting the ability of Goldman Sachs to act effectively as financial advisor to the Pioneer board.

On October 5, 2023, representatives of Davis Polk sent a revised draft of the Merger Agreement to representatives of Gibson Dunn, which included the following key changes to the draft of the Merger Agreement received from Gibson Dunn on October 2, 2023: (a) noting that the extent to which Pioneer would be permitted to pay quarterly dividends between signing and closing was subject to further business discussions, (b) rejecting the proposed “reverse” termination fee payable by ExxonMobil in the event the Merger Agreement was terminated due to failure to obtain necessary antitrust approvals, (c) agreeing to maintain an office in Midland, Texas for two years following the closing, (d) rejecting the proposal regarding Pioneer’s representatives being nominated at the next annual meeting of ExxonMobil following the closing and (e) generally accepting the proposal regarding automatically extending the outside date for regulatory approvals.

Later that day, Messrs. Sheffield and Woods held a call to discuss the status of the potential transaction, including the potential timing of a transaction announcement and employee communication and integration plans.

Also on October 5, 2023, ExxonMobil provided certain due diligence materials regarding ExxonMobil to Pioneer in connection with Pioneer’s due diligence review of ExxonMobil.

That evening, the Wall Street Journal published an article discussing a proposed transaction between ExxonMobil and Pioneer. The publication of the article did not have a material impact on the negotiations of the proposed transaction.

Over the next several days, Pioneer entered into separate engagement letters with each of Goldman Sachs, Morgan Stanley, Petrie Partners, LLC and BofA Securities, Inc., pursuant to which Pioneer engaged each such firm to serve as a financial advisor to Pioneer with respect to the proposed transaction. Petrie Partners and BofA Securities were retained as additional advisors to Pioneer based on their extensive industry expertise and knowledge of Pioneer, and not by reason of any conflict of interest relating to any other financial advisor. Petrie Partners and BofA Securities were retained by Pioneer to be advisors for the proposed transaction because they have from time to time provided advice to Pioneer with respect to possible transactions and other strategic alternatives and have had discussions with industry participants about such transactions.

On October 6, 2023, Messrs. Sheffield and Woods discussed the potential transaction. Mr. Woods informed Mr. Sheffield that ExxonMobil would not accept an antitrust termination fee payable by ExxonMobil, that Pioneer would be permitted to pay the variable component of its dividend payable in the fourth quarter of 2023, that the parties would continue to discuss the variable component of the dividend payable in the first quarter of 2024 and that ExxonMobil proposed ownership by Pioneer stockholders of 11.75% of the combined company. Mr. Sheffield responded that the ownership should be 12%, which Mr. Sheffield indicated would result in an exchange ratio of 2.382 ExxonMobil shares for each Pioneer share based on closing prices as of October 4, 2023.

Throughout the period, the ExxonMobil board and its Finance Committee met on several occasions to consider and discuss the potential transaction, and were briefed in those meetings by management and its

 

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financial and legal advisors. On October 7, 2023, the ExxonMobil board convened a meeting to review and consider the proposed Merger Agreement and the transactions contemplated thereby including the Merger and the issuance of ExxonMobil common stock as consideration in the Merger. Present at the meeting were members of ExxonMobil’s senior management and representatives of Citi and Davis Polk. At the meeting, ExxonMobil’s senior management briefed the ExxonMobil board on the status of negotiations regarding the transaction, reviewed the strategic rationale for the proposed transaction and provided an overview of the economic analysis for the exchange ratio in the Merger. Representatives of Citi reviewed with the ExxonMobil board certain financial aspects of the proposed transaction and representatives of Davis Polk discussed with the ExxonMobil board certain material terms of the Merger Agreement and certain legal matters relating to the board of directors consideration of the proposed transaction. Following consideration of the proposed terms of the transaction and discussion among the directors, senior management and ExxonMobil’s legal and financial advisors, the ExxonMobil board unanimously approved the transaction and the related issuance of ExxonMobil common stock as consideration in the Merger, subject to resolution by senior management of final terms.

Also on October 7, 2023, the Pioneer board met with members of Pioneer senior management to discuss the matters raised in the call between Messrs. Sheffield and Woods the prior day, including the proposals on the ownership by Pioneer stockholders of the combined company and the resulting exchange ratio. Following the meeting, Messrs. Sheffield and Woods further discussed the ownership split and exchange ratio proposals and agreed that the ownership by Pioneer stockholders of the combined company would be 11.875%. Messrs. Sheffield and Woods did not discuss the detail or methodology for calculating the resulting exchange ratio based on that ownership percentage or the ExxonMobil share count upon which the ownership percentage or exchange ratio should be determined. They also discussed, among other things, the ability of Pioneer to continue to pay its base dividend through closing and the variable component of its dividend payable in the fourth quarter of 2023 and the first quarter of 2024, that two Pioneer board representatives, including Mr. Sheffield, would serve on the ExxonMobil board, that ExxonMobil would not pay a “reverse” termination fee in the event antitrust approvals were not obtained, and certain employee matters.

On October 7, 2023, representatives of Gibson Dunn sent a revised draft of the Merger Agreement to representatives of Davis Polk, which included the following key changes to the draft of the Merger Agreement received from Davis Polk on October 5, 2023: (a) revising the interim operating covenants to provide that Pioneer may continue to pay quarterly dividends between signing and closing consistent with historic practice and Pioneer’s dividend policy until April 1, 2024, with the variable component of the dividend payable in the first quarter of 2024 limited to 75% of the variable dividend amount calculated in accordance with such dividend policy, and following such date, Pioneer may continue to pay quarterly dividends in an amount not to exceed $1.25 per share of Pioneer common stock, (b) proposing a termination fee, payable by Pioneer in the event the Merger Agreement is terminated in certain situations, of 3.0% of the equity value of the proposed transaction and (c) accepting that ExxonMobil would not pay a “reverse” termination fee to Pioneer in the event the Merger Agreement was terminated due to failure to obtain necessary antitrust approvals.

Later on October 7, 2023, representatives of Davis Polk sent a revised draft of the Merger Agreement to representatives of Gibson Dunn, which included the following key changes to the draft of the Merger Agreement received from Gibson Dunn on the afternoon of October 7, 2023: (a) applying the 75% limitation to the full dividend payable in the first quarter of 2024, not merely the variable component of such dividend, and (b) accepting the proposed termination fee of 3.0% of the equity value of the proposed transaction.

Also on October 7, 2023, Messrs. Dealy, Berg and Volkov discussed the calculation of the exchange ratio to achieve the agreed ownership by Pioneer stockholders of 11.875% of the combined company, including the number of ExxonMobil shares to be used for purposes of the calculation. In particular, Messrs. Dealy and Berg conveyed that the ExxonMobil shares should include the shares outstanding at signing of the Merger Agreement, as well as certain other unissued shares.

On October 8, 2023, Messrs. Sheffield and Woods further discussed the calculation of the exchange ratio to achieve the agreed ownership by Pioneer stockholders of 11.875% of the combined company. In particular,

 

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Mr. Sheffield reiterated the calculation methodology conveyed to ExxonMobil on the previous day and proposed an exchange ratio of 2.32344 ExxonMobil shares for each Pioneer share based on Pioneer’s calculation of the ExxonMobil share count.

Later on October 8, 2023, the Pioneer board met with members of Pioneer senior management and representatives of Goldman Sachs and Gibson Dunn. Messrs. Sheffield and Dealy updated the Pioneer board on Mr. Sheffield’s discussions with Mr. Woods, including matters related to the exchange ratio and its calculation and the ability of Pioneer to pay the variable component of its dividend following signing. Following discussion, the Pioneer board instructed Mr. Sheffield to proceed with the exchange ratio that Mr. Sheffield proposed to Mr. Woods earlier that day. After the Pioneer board meeting, Messrs. Sheffield and Woods further discussed the exchange ratio and Mr. Sheffield reiterated his proposal on the exchange ratio from earlier that day. Mr. Woods proposed that the parties continue to negotiate an exchange ratio reflecting a compromise on the ExxonMobil share count, which Mr. Sheffield declined.

On October 9, 2023, Messrs. Sheffield and Woods further discussed the exchange ratio. Mr. Sheffield reiterated his proposal on the exchange ratio from the previous day and indicated that Pioneer would be willing to compromise on its ability to pay the variable component of its dividend payable in the fourth quarter of 2023 and the first quarter of 2024. Mr. Sheffield proposed an exchange ratio of 2.32344 ExxonMobil shares for each Pioneer share, a limitation on the variable component of the dividend payable in the fourth quarter of 2023 and the first quarter of 2024 to 75% and 50%, respectively, of the variable dividend amount calculated in accordance with Pioneer’s dividend policy, the ability of Pioneer to continue to pay a base dividend of $1.25 per Pioneer share payable through closing, and Mr. Dealy being the co-lead of the transition and integration team of ExxonMobil as the Pioneer representative. Mr. Sheffield also noted that the parties’ counsel would discuss whether the Merger Agreement could reflect ExxonMobil’s expectations on share repurchases in the fourth quarter of 2023 and thereafter. Mr. Woods later responded that ExxonMobil would agree to the proposal with the following clarifications: an exchange ratio of 2.3234 ExxonMobil shares for each Pioneer share, Mr. Dealy would be Pioneer’s lead on the integration and transition team and the disclosure schedules to the Merger Agreement would include ExxonMobil’s commitment regarding its $17.5 billion annual share repurchase program in 2023 and 2024.

Later that day, representatives of Gibson Dunn sent a revised draft of the Merger Agreement to representatives of Davis Polk, which included the proposals discussed between Messrs. Sheffield and Woods. Representatives of Gibson Dunn and Davis Polk held calls to discuss, and exchanged revised drafts of, the Merger Agreement and the related disclosure schedules until the execution of the Merger Agreement on October 10, 2023.

On October 10, 2023, Messrs. Berg, Dealy and Volkov held a call to finalize remaining open items in the Merger Agreement, including with respect to Pioneer’s interim operating covenants and employee matters.

Later on October 10, 2023, the Pioneer board met with members of Pioneer senior management and representatives of Goldman Sachs and Gibson Dunn to consider the proposed final terms of the Merger Agreement. Mr. Sheffield discussed the resolution of the open matters that had been discussed at the October 8 meeting of the Pioneer board. Mr. Woods then joined the meeting and discussed with the Pioneer board ExxonMobil’s commitment to its share repurchase program, capital allocation strategy, balance sheet matters and other matters with respect to ExxonMobil’s business, technologies and employees. He also expressed ExxonMobil’s commitment to its previously announced emissions reduction efforts and its commitment to being a leading voice in a thoughtful energy transition. Mr. Woods then answered questions from Pioneer directors, after which he left the meeting. Representatives of Gibson Dunn reviewed with the Pioneer board its fiduciary duties in connection with the proposed transaction and provided a summary of the terms of the Merger Agreement. A representative of Goldman Sachs then reviewed with the Pioneer board Goldman Sachs’ financial analysis and rendered to the Pioneer board Goldman Sachs’ oral opinion, subsequently confirmed in writing, that, as of October 10, 2023 and based upon and subject to the factors and assumptions set forth therein, the Merger

 

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Consideration to be paid to the holders (other than ExxonMobil and its affiliates) of Pioneer common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders, as more fully described below in the section entitled “—Opinion of Pioneer’s Financial Advisor”. Following discussion of the proposed transaction by the Pioneer board, the Pioneer board unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, were fair to and in the best interests of Pioneer and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, in accordance with the requirements of Delaware law, (iii) resolved, subject to the provisions of the Merger Agreement, to recommend adoption of the Merger Agreement by the Pioneer stockholders and (iv) directed that the Merger Agreement be submitted to the Pioneer stockholders for their adoption.

Later that evening, Pioneer and ExxonMobil executed the Merger Agreement.

Prior to the opening of the U.S. stock markets on October 11, 2023, Pioneer and ExxonMobil issued a joint press release announcing the merger and held a joint investor call to discuss the transaction.

CERTAIN RELATIONSHIPS BETWEEN EXXONMOBIL AND PIONEER 

ExxonMobil and Pioneer, or their respective affiliates, are parties to certain commercial arrangements with one another, such as operating agreements, joint venture agreements, unitization agreements, commodity sales agreements and mineral lease agreements, which are not material, individually or in the aggregate, to ExxonMobil or Pioneer. Except as described in this proxy statement/prospectus, there are and have been no past, present or proposed material contracts, arrangements, understandings, relationships, negotiations or transactions during the current fiscal years of ExxonMobil and Pioneer or the five immediately preceding fiscal years of ExxonMobil and Pioneer, between ExxonMobil or its affiliates, on the one hand, and Pioneer or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer for or other acquisition of securities, the election of directors, or the sale or other transfer of a material amount of assets.

RECOMMENDATION OF THE PIONEER BOARD OF DIRECTORS AND REASONS FOR THE MERGER

By unanimous vote, the Pioneer board, at a meeting held on October 10, 2023, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of Pioneer and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, in accordance with the requirements of the DGCL, (iii) resolved (subject to certain exceptions set forth in the Merger Agreement) to recommend adoption of the Merger Agreement by Pioneer stockholders and (iv) directed that the Merger Agreement be submitted to Pioneer stockholders for their adoption. The Pioneer board unanimously recommends that Pioneer stockholders vote “FOR” the Merger Agreement Proposal and “FOR” the Advisory Compensation Proposal.

This proxy statement/prospectus contains important information regarding these proposals and factors that Pioneer stockholders should consider when deciding how to cast their votes. Pioneer stockholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this proxy statement/prospectus, for more detailed information regarding the Merger Agreement and the Merger.

In reaching its determination, approval and recommendation, the Pioneer board consulted extensively with Pioneer’s management and financial and legal advisors and considered a range of factors, as discussed below. Factors that weighed in favor of the Merger (not necessarily in order of relative importance) include:

 

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Greater Stockholder Value and Return Potential. The attractive value and nature of the consideration to be received in the Merger by Pioneer stockholders, including the fact that:

 

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The stock-for-stock merger allows Pioneer stockholders to participate in the value and opportunities of ExxonMobil, including ExxonMobil’s worldwide asset portfolio, dividends, share repurchases and expected future growth, which the Pioneer board viewed as an important opportunity for Pioneer stockholders to enhance long-term returns;

 

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Based on the closing trading price of ExxonMobil common stock of $110.92 on October 9, 2023 (the day prior to the Pioneer board’s approval of the Merger), the Merger Consideration represented an implied value of $257.71 per share of Pioneer common stock, an approximately 19.9% premium to Pioneer’s unaffected closing price as of October 5, 2023, the last trading day prior to the publication of the first of several news stories in October 2023 speculating on the potential transaction;

 

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Based on the exchange ratio, Pioneer stockholders would own approximately 11.9% of the combined company on a fully diluted pro forma basis as of October 10, 2023, allowing Pioneer stockholders to participate in the equity value of the combined company, which will include the benefits of future growth and expected synergies resulting from the Merger;

 

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The exchange ratio is fixed and will not fluctuate in the event that the market price of ExxonMobil common stock increases relative to the market price of Pioneer common stock between the date of the Merger Agreement and the closing of the Merger;

 

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The consideration of ExxonMobil common stock to be paid to holders of Pioneer common stock comes with a reliable and growing cash dividend by ExxonMobil (most recently declared at $0.95 per share quarterly (or $3.80 annualized)). ExxonMobil has a history of 41 consecutive years of annual dividend growth and has publicly stated the importance ExxonMobil places on its dividend in making capital allocation decisions;

 

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ExxonMobil’s stated intention to repurchase up to approximately $17.5 billion of its common stock on an annual basis in 2023 and 2024;

 

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While there is trading correlation between Pioneer’s and ExxonMobil’s common stock, ExxonMobil common stock is less responsive to changes in price of West Texas Intermediate (“WTI”) oil, thereby mitigating WTI price volatility;

 

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The trading market for ExxonMobil common stock should provide Pioneer stockholders who receive ExxonMobil common stock in the Merger with greater trading liquidity than is currently available for Pioneer common stock; and

 

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The Merger is structured as a stock-for-stock transaction and is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Benefits of a Combined Company: Greater Scale and Financial Strength. The belief of the Pioneer board that ExxonMobil, following the Merger, would be well positioned to achieve further free cash flow growth and generate superior returns for Pioneer’s former stockholders, including as a result of:

 

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The benefits associated with consolidating the assets of the two companies in the Permian Basin, including the significant expected annual operating synergies associated with the following:

 

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combining Pioneer’s large, contiguous, undeveloped Permian Basin acreage with ExxonMobil’s proprietary technologies and resource development expertise in the Permian Basin;

 

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increasing short-cycle capital flexibility and lower-cost-of-supply production in the United States;

 

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leveraging the scale, technology and operating expertise of the combined company to increase resource recovery and deliver capital efficiency and cost performance;

 

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maximizing value in the Permian Basin across the combined company’s fully integrated value chain; and

 

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utilizing drilling of longer laterals including those over four miles in length to reduce the number of wells needed and capture additional synergies;

 

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The expectation that the Merger would be accretive to the combined company’s earnings per share, operating cash flow and free cash flow in 2024, as well as highly accretive in the mid- to long-term;

 

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Combined Permian Basin acreage of approximately 1.4 million acres, and a combined production base of 1.3 million net barrels oil equivalent per day based on forecasted production for the fiscal year ended 2023;

 

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The belief that the development plans of the combined company could result in a combined production base from the Permian Basin of approximately 2.0 million net barrels oil equivalent per day by end 2027;

 

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The expectation that the combined company will generate double-digit returns through significant synergies including “best-in-class” drilling efficiency, resulting in fewer days to drill and complete while maintaining a smaller surface footprint;

 

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The expected synergies resulting from the combination of Pioneer’s asset base and ExxonMobil’s significant investments in the research and development of enhanced well recovery techniques, including multi-year rock physics research, field diagnostic programs and differential well fracture geometry, to increase completion and recovery effectiveness;

 

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The belief that the combined company will have greater flexibility to react to market demand changes based on short-cycle barrels comprising over 40% of the combined company’s upstream portfolio by 2027, as well as the ability to utilize enhanced field digitalization and automation via remote operations, further optimizing throughput, cost, lower emissions and safety;

 

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ExxonMobil’s strong, stable balance sheet, with approximately $33 billion of cash at the end of the third quarter 2023, is well-positioned to weather downturns in the commodity and economic cycles, while allowing ExxonMobil to continue to invest in projects with attractive returns, including lower-emission business opportunities;

 

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The belief that no other potential merger or acquisition would afford Pioneer stockholders value competitive with that offered by ExxonMobil, given ExxonMobil’s global asset portfolio of top-tier projects, stable and growing dividend, prospects for further share repurchases, size and scale, trading liquidity and ability to drive synergy value from the combination;

 

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The expectation that ExxonMobil’s project pipeline will support the combined company’s advantaged cost of supply through long-term commodity cycles;

 

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The expectation that ExxonMobil will operate with a lower cost of capital, relative to Pioneer, given the size, scale and diversified business mix of ExxonMobil;

 

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The global scale and diversified portfolio of ExxonMobil, including its Upstream, Product Solutions and Low Carbon Solutions businesses, which are expected to reduce cash flow volatility and better support future strategic investments and capital returns to shareholders compared to Pioneer on a standalone basis;

 

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While ExxonMobil and Pioneer are both working to be industry leaders in the energy transition, ExxonMobil after the Merger will have greater scale and resources to respond to the evolving environment during the energy transition;

 

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ExxonMobil’s industry-leading plans to achieve net zero Scope 1 and Scope 2 greenhouse gas emissions from its Permian unconventional operations by 2030 and its industry-leading new technologies for monitoring, measuring and addressing fugitive methane, which ExxonMobil intends to leverage to accelerate Pioneer’s net zero emissions plan by 15 years, to 2035 and to lower both companies’ methane emissions; and

 

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•

The combined workforce is expected to continue to increase efficiency and deliver stockholder value, and the Merger Agreement includes provisions intended to facilitate the retention of Pioneer employees and enhance their ability to provide value for shareholders of the combined company.

Dividends. The Pioneer board reviewed and considered the fact that Pioneer could continue to return value to Pioneer stockholders through dividends until the closing of the Merger, including the ability to continue to pay its base dividend throughout that period and a portion of the variable component of such dividend for the dividend payable in the fourth quarter of 2023 and the first quarter of 2024, along with the ability to accelerate the payment of the base and variable components of the dividend in the first quarter of 2024 if the closing is scheduled to occur prior to the customary record date for that dividend payment.

Opportunity to Receive Alternative Acquisition Proposals and to Terminate the Merger in Order to Accept a Superior Proposal. The Pioneer board considered the terms of the Merger Agreement related to Pioneer’s ability to respond to unsolicited Acquisition Proposals and determined that the provisions of the Merger Agreement would not deter or preclude any third party from making a competing proposal and that the Pioneer board would be able, under certain circumstances, to furnish information and enter into discussions and negotiations in connection with a competing proposal. In this regard, the Pioneer board considered that:

 

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experience demonstrates that an executed Merger Agreement is not a deterrent to potential topping bids;

 

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subject to compliance with the applicable provisions of the Merger Agreement, the Pioneer board may, before approval of the Merger by Pioneer stockholders, change its recommendation to Pioneer stockholders with respect to approval of the Merger if the Pioneer board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably likely be inconsistent with its fiduciary duties under Delaware law;

 

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subject to its compliance with the applicable provisions of the Merger Agreement, the Pioneer board may terminate the Merger Agreement in order to enter into a superior proposal; and

 

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the Pioneer board believed that the termination fee of $1,815,000,000, which equals approximately 3.0% of the equity value implied in the Merger, is reasonable in light of the circumstances and the overall terms of the Merger Agreement, and would not discourage alternative Acquisition Proposals from credible third parties willing and able to make such proposals. Pioneer would be required to pay the termination fee to ExxonMobil in certain circumstances, including if (i) ExxonMobil terminates the Merger Agreement in connection with a change in the Pioneer board’s recommendation to its stockholders with respect to approval of the Merger or (ii) Pioneer terminates the Merger Agreement in order to enter into a definitive agreement with respect to a superior proposal.

Post-Merger Corporate Governance. The Pioneer board considered that the Merger Agreement provides that (i) ExxonMobil must take all necessary corporate action to appoint Scott D. Sheffield and one director of the Pioneer board (reasonably acceptable to ExxonMobil) to the ExxonMobil board immediately following the effective time of the Merger, (ii) ExxonMobil must maintain Pioneer’s headquarters in Irving, Texas and an office in Midland, Texas for at least two years following the closing of the Merger and (iii) ExxonMobil must appoint Richard P. Dealy as Pioneer’s lead representative on the integration and transition team established and maintained by ExxonMobil, resulting in the expectation that such factors will add valuable expertise and experience and in-depth familiarity with Pioneer’s assets and operations to ExxonMobil, which will enhance the likelihood of attaining the strategic benefits that ExxonMobil expects to derive from the Merger.

Opinion of Pioneer’s Financial Advisor. The Pioneer board considered the oral opinion of Goldman Sachs, subsequently confirmed in writing, that, as of October 10, 2023 and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid to the holders (other than ExxonMobil and its affiliates) of Pioneer common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.

 

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Interim Operating Covenants. The Pioneer board reviewed and considered the restrictions imposed on Pioneer’s business and operations during the pendency of the Merger and concluded that such restrictions are reasonable and not unduly burdensome.

Other Terms of the Merger Agreement. The Pioneer board reviewed and considered the terms of the Merger Agreement, taken as a whole, including the parties’ representations, warranties and covenants, and the circumstances under which the Merger Agreement may be terminated, and concluded that such terms are reasonable to Pioneer and the Pioneer stockholders. The Pioneer board noted in particular that the completion of the Merger is not subject to any financing condition or any condition based upon ExxonMobil shareholder approval, which enhances the likelihood that the Merger will be completed.

In the course of its deliberations, the Pioneer board also considered a variety of risks and other potentially negative factors, including the following:

 

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Risks Associated with Regulatory Approval. The Merger is conditioned on the absence of an injunction prohibiting the consummation of the Merger, the expiration or termination of the waiting period under the HSR Act and the absence of a Burdensome Condition being imposed on ExxonMobil or its subsidiaries, including Pioneer from and after closing. While each party is required to use reasonable best efforts to resist, defend against, lift or rescind the entry of any injunction or order prohibiting the parties from consummating the Merger, and is required to defend and contest any litigation pursued by a governmental authority seeking such an injunction or prohibition, ExxonMobil is not obligated to accept or agree to certain divestiture or other remedies in obtaining regulatory approval nor is ExxonMobil obligated to compensate Pioneer if regulatory approval of the Merger is not obtained;

 

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Fixed Exchange Ratio. The Pioneer board considered that because the Merger Consideration is based on a fixed exchange ratio rather than a fixed value, Pioneer stockholders will bear the risk of a decrease in the trading price of ExxonMobil common stock during the pendency of the Merger and the Merger Agreement does not provide Pioneer with a collar or a value-based termination right;

 

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Interim Operating Covenants. The Pioneer board reviewed and considered the restrictions imposed on Pioneer’s business and operations during the pendency of the Merger and, although it concluded that such restrictions are reasonable and not unduly burdensome, such restrictions may delay or prevent Pioneer from undertaking business opportunities that may arise or other actions it could potentially otherwise take with respect to the operations of Pioneer pending the consummation of the Merger;

 

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Risks Associated with the Pendency of the Merger. The Pioneer board reviewed and considered the risks and contingencies relating to the announcement and pendency of the Merger (including the likelihood of litigation or other opposition challenging the Merger and the other transactions contemplated by the Merger Agreement) and the risks and costs to Pioneer if the Merger is not completed in a timely manner or if the Merger does not close at all, including potential employee attrition, the impact on Pioneer’s relationships with third parties and the effect termination of the Merger Agreement may have on the trading price of Pioneer common stock and Pioneer’s operating results;

 

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Possible Failure to Integrate. The Pioneer board reviewed and considered the potential challenges and difficulties in integrating the operations of Pioneer and ExxonMobil and the risk that operational efficiencies between the two companies, or other anticipated benefits of the Merger, might not be realized or might take longer to realize than expected;

 

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Opportunity to Receive Acquisition Proposals and to Terminate the Merger in Order to Accept a Superior Proposal. The Pioneer board considered the possibility that a third party may be willing to enter into a strategic combination with Pioneer on terms more favorable than the Merger. In connection therewith, the Pioneer board considered the terms of the Merger Agreement relating to no-shop covenants and termination fees and the potential that such provisions might deter alternative bidders that might have been willing to submit an Acquisition Proposal to Pioneer;

 

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Interests of Certain Pioneer Directors and Executive Officers. The Pioneer board was aware of and considered that Pioneer’s directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of stockholders of Pioneer generally, as described below under the heading “Interests of Directors and Executive Officers of Pioneer in the Merger”;

 

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Merger Costs. The Pioneer board considered the significant costs associated with the completion of the Merger, including Pioneer management’s time and energy and potential opportunity cost that will be incurred by the combined company as a result of the Merger; and

 

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Other Risks. The Pioneer board considered risks of the type and nature described under the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors”.

The Pioneer board believed that, overall, the potential benefits of the Merger to Pioneer stockholders outweighed the potential risks and uncertainties of the Merger.

This discussion of the information and factors considered by the Pioneer board in reaching its conclusion and recommendations includes all of the material factors considered by the Pioneer board but is not intended to be exhaustive and is not provided in any specific order or ranking. In view of the wide variety of factors considered by the Pioneer board in evaluating the Merger Agreement and the related transactions contemplated thereby, and the complexity of these matters, the Pioneer board did not find it practicable to, and did not attempt to, quantify, rank or otherwise assign relative weight to those factors. In addition, different members of the Pioneer board may have given different weight to different factors. The Pioneer board did not reach any specific conclusion with respect to any of the factors considered and instead conducted an overall analysis of such factors and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Merger Agreement.

It should be noted that this explanation of the reasoning of the Pioneer board and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section titled “Cautionary Statement Regarding Forward-Looking Statements.”

EXXONMOBIL’S REASONS FOR THE MERGER

ExxonMobil believes the Merger will create sustainable long-term value for its stockholders. Key strategic benefits to ExxonMobil include:

 

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Transformed Upstream Portfolio. As a result of the Merger, ExxonMobil will own and operate an industry-leading portfolio of undeveloped high-quality, high-return U.S. unconventional inventory by combining Pioneer’s 856,000 net acres in the Midland Basin with ExxonMobil’s pre-existing 570,000 net acres in the Delaware and Midland Basins.

 

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Increased Resource Recovery. The Merger will permit ExxonMobil to recover more resource, more efficiently. As a result of the Merger, ExxonMobil’s industry-leading resource development approach and advanced technologies will increase production of the large-scale, high-quality undeveloped Midland acreage. Pioneer’s contiguous acreage will allow ExxonMobil to drill long, best-in-class laterals, which will result in fewer wells and a smaller surface footprint. ExxonMobil also expects to improve field digitalization and automation to optimize production throughput and cost. In addition, by leveraging ExxonMobil’s Houston-based remote operations center, ExxonMobil will have even more efficient operations monitoring and response.

 

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Entrepreneurial Culture. Pioneer’s deep industry and basin expertise, along with its entrepreneurial culture and innovative and talented employee base, will benefit ExxonMobil’s broader portfolio, enhancing capital efficiency and cost performance.

 

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Transaction Synergies. The Merger will create significant synergies that will enable a lower-cost-of-supply production through higher capital efficiency and higher resource recovery. The Merger

 

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will increase ExxonMobil’s exposure to short-cycle, low cost-of-supply liquids in the U.S. The Merger will enable ExxonMobil to quickly respond to demand changes and increase capture of price and volume upside. Downstream, the Merger will increase the integration between high-value, light Permian crude and ExxonMobil’s premier refinery and chemical footprint on the U.S. Gulf Coast.

 

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Shareholder and Societal Value. The Merger will enable greater U.S. energy security and will benefit consumers by applying advanced technologies, operating excellence, environmental best practices and financial capability to an important source of domestic supply. As a result of the Merger, ExxonMobil will be able to recover more resource more efficiently and with a lower environmental impact.

 

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Environmental Footprint. ExxonMobil plans to leverage its greenhouse gas reduction capabilities to accelerate Pioneer’s net-zero ambition by 15 years, from 2050 to 2035, securing a reduction in the future environmental footprint of both companies. The Merger will lower both companies’ methane emissions in the Permian by using the same strategy and applying ExxonMobil’s industry-leading new technologies for monitoring, measuring, and addressing fugitive methane. In addition, by using combined operating capabilities and infrastructure, ExxonMobil expects to increase the amount of recycled water used in its Permian operations to more than 90% by 2030.

 

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Capital Efficiency. With a development program that incorporates a lower cost well design and requires fewer wells, ExxonMobil expects to be able to increase capital efficiency. This will increase economic viability of marginal areas of the resource, allowing ExxonMobil to develop more of the field.

 

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Safety Program. ExxonMobil will bring its world-class safety program to Pioneer’s Midland operations, sharing best practices between the companies to improve safety performance to the best of both.

CERTAIN PIONEER UNAUDITED PROSPECTIVE FINANCIAL INFORMATION

Pioneer does not, as a matter of course, publicly disclose long-term consolidated forecasts or internal projections as to future performance, revenues, production, earnings or other results due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in connection with the Pioneer board’s consideration of the Merger, Pioneer’s management prepared certain unaudited internal financial analyses and forecasts regarding Pioneer’s future performance for the fourth quarter of 2023 and the years 2024 through 2028 on a standalone basis without giving effect to the Merger (the “Pioneer management forecast”) and provided the Pioneer management forecast to the Pioneer board in connection with its evaluation of the proposed Merger and to Goldman Sachs, Pioneer’s financial advisor, as approved by Pioneer for its use and reliance in connection with its financial analyses and opinion (see the section described above in this proxy statement/prospectus entitled “—Opinion of Pioneer’s Financial Advisor”). The Pioneer management forecast was also provided to ExxonMobil.

The summary of these projections is being included in this proxy statement/prospectus to give Pioneer stockholders access to non-public information that was provided to the Pioneer board and Goldman Sachs for the purposes described above, and is not intended to influence your decision whether to vote in favor of the Merger Agreement Proposal or any other proposal at the Special Meeting. The inclusion of this information should not be regarded as an indication that any of Pioneer or its advisors or other representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future performance or events, or that it should be construed as financial guidance, and such summary projections set forth below should not be relied on as such.

This information was prepared solely for internal use and is subjective in many respects. While presented with numeric specificity, the Pioneer management forecast reflects numerous estimates and assumptions that are inherently uncertain and may be beyond the control of Pioneer, including, among others, Pioneer’s assumptions about energy markets, production and sales volume levels, oil and gas industry activity, commodity prices, demand for crude oil and natural gas, the availability of financing to fund the exploration and development costs associated

 

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with the respective projected drilling programs, general economic and regulatory conditions, and other matters described in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements”, “Where You Can Find More Information” and “Risk Factors.” The Pioneer management forecast reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Pioneer can give no assurance that the Pioneer management forecast and the underlying estimates and assumptions will be realized. In addition, since the Pioneer management forecast covers multiple years, such information by its nature becomes less predictive with each successive year. This information constitutes “forward-looking statements” and actual results may differ materially and adversely from those projected.

The Pioneer management forecast was not prepared with a view toward public disclosure nor was it prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information. The prospective financial information included in this document has been prepared by, and is the responsibility of, Pioneer’s management. Neither Pioneer’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial and operating information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The report of the independent registered public accounting firm to Pioneer contained in its Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated by reference into this proxy statement/prospectus, relates to Pioneer’s previously issued financial statements. It does not extend to the prospective financial information and should not be read to do so.

Furthermore, the Pioneer management forecast does not take into account any circumstances or events occurring after the date it was prepared. Pioneer can give no assurance that, had the Pioneer management forecast been prepared as of the date of this proxy statement/prospectus or the date of the Special Meeting, similar estimates and assumptions would be used. Except as required by applicable securities laws, Pioneer does not intend to, and disclaims any obligation to, make publicly available any update or other revision to the Pioneer management forecast to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, including with respect to the accounting treatment of the Merger under GAAP, or to reflect changes in general economic or industry conditions. The Pioneer management forecast does not take into account the possible financial and other effects on Pioneer of the Merger, the effect on Pioneer of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the Merger Agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Merger. Further, the Pioneer management forecast does not take into account the effect on Pioneer of any possible failure of the Merger to occur. None of Pioneer or its affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any Pioneer stockholder or other person regarding Pioneer’s ultimate performance compared to the information contained in the Pioneer management forecast or to the effect that the forecasted results will be achieved. The inclusion of the Pioneer management forecast herein should not be deemed an admission or representation by Pioneer or its advisors or any other person that it is viewed as material information of Pioneer, particularly in light of the inherent risks and uncertainties associated with such forecasts. The summary of the unaudited prospective financial and operating information included below is not being included to influence your decision whether to vote in favor of the Merger Agreement Proposal or any other proposal at the Special Meeting, but is being provided solely because it was made available to the Pioneer board and Goldman Sachs for the purposes described above.

In light of the foregoing, and considering that the Special Meeting will be held several months after the Pioneer management forecast was prepared, as well as the uncertainties inherent in any forecasted information, Pioneer stockholders are cautioned not to place undue reliance on such information, and Pioneer urges all Pioneer stockholders to review its most recent SEC filings for a description of its reported financial results. See “Where You Can Find More Information.”

 

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In preparing the prospective financial and operating information for Pioneer described below, the Pioneer management team used the following oil and natural gas price assumptions, which are based on New York Mercantile Exchange strip pricing available on October 2, 2023:

 

		Q4 2023E				2024E				2025E				2026E				2027E				2028E
Brent Oil ($/bbl)		$	93.81			$	87.32			$	81.03			$	76.85			$	73.56			$	71.02
WTI Oil ($/bbl)		$	89.90			$	82.95			$	76.15			$	71.54			$	67.96			$	65.07
Henry Hub Gas ($/Mcf)		$	3.09			$	3.41			$	3.95			$	3.97			$	3.90			$	3.81

The following table sets forth a summary of the Pioneer management forecast, based on the price assumptions indicated above, which was prepared by Pioneer management and provided to the Pioneer board in connection with its evaluation of the proposed Merger and to Goldman Sachs, Pioneer’s financial advisor, as approved by Pioneer for its use and reliance in connection with its financial analyses and opinion (see the section above entitled “—Opinion of Pioneer’s Financial Advisor”). The Pioneer management forecast should not be regarded as an indication that Pioneer considered, or now considers, it to be necessarily predictive of actual future performance or events, or that it should be construed as financial guidance, and such information does not take into account any circumstances or events occurring after the date it was prepared.

 

		Unaudited Pioneer Management Forecast
($ in millions, except production)		Q4 2023E				2024E				2025E				2026E				2027E				2028E
Daily production (Mboe/d)			724				772				827				884				949				1,022
Adjusted EBITDAX (1)		$	2,911			$	11,372			$	11,119			$	11,018			$	11,085			$	11,326
Capital expenditures (2)		$	1,184			$	4,571			$	4,950			$	5,212			$	5,383			$	5,380
Unlevered free cash flow (3)		$	1,496			$	5,659			$	5,024			$	4,494			$	4,394			$	4,642

 

(1)

Adjusted EBITDAX for purposes of the Pioneer management forecast is defined as earnings before interest expense, income taxes, depreciation, depletion, amortization, and exploration expense, non-cash fair value gains (losses) on derivatives, accretion of discount on asset retirement obligations, and interest and other income. Adjusted EBITDAX is a non-GAAP financial measure as it excludes amounts included in income before taxes and net income, the most directly comparable measures calculated in accordance with GAAP. This measure should not be considered as a substitute for other measures prepared in accordance with GAAP. It also may not be comparable to Adjusted EBITDAX disclosed by Pioneer for historical periods.

(2)	Capital expenditures include additions to oil and gas properties and other property additions.

(3)

Unlevered free cash flow is defined as Adjusted EBITDAX less unlevered taxes, plus or minus changes in unlevered working capital, and less capital expenditures. Unlevered free cash flow is a non-GAAP financial measure as it excludes amounts included in cash provided by operating activities, the most directly comparable measure calculated in accordance with GAAP. This measure should not be considered as a substitute for other measures prepared in accordance with GAAP.

Pioneer does not intend to update or otherwise revise the Pioneer management forecast to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such forecast are no longer appropriate, except as may be required by applicable law.

OPINION OF PIONEER’S FINANCIAL ADVISOR

Goldman Sachs rendered its oral opinion, subsequently confirmed in writing, to the Pioneer board that, as of October 10, 2023 and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid to the holders (other than ExxonMobil and its affiliates) of Pioneer common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated October 10, 2023, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in

 

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connection with the opinion, is attached as Annex B. The summary of Goldman Sachs’ opinion contained in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Pioneer board in connection with its consideration of the Merger and such opinion does not constitute a recommendation as to how any holder of Pioneer common stock should vote with respect to the Merger or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

•

the Merger Agreement;

 

•

annual reports to stockholders and Annual Reports on Form 10 -K of Pioneer and ExxonMobil for the five years ended December 31, 2022;

 

•

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Pioneer and ExxonMobil;

 

•

certain other communications from Pioneer and ExxonMobil to their respective stockholders;

 

•

certain publicly available research analyst reports for Pioneer and ExxonMobil; and

 

•

certain internal financial analyses and forecasts for Pioneer prepared by its management, as approved for Goldman Sachs’ use by Pioneer (referred to in this section as the “Pioneer management forecast” and which are summarized in the section entitled “—Certain Pioneer Unaudited Prospective Financial Information” beginning on page 65).

Goldman Sachs also held discussions with members of the senior management of Pioneer regarding their assessment of the past and current business operations, financial condition and future prospects of Pioneer; reviewed the reported price and trading activity for Pioneer common stock and ExxonMobil common stock; reviewed the financial terms of certain recent business combinations in the exploration and production industry; and performed such other studies and analyses, and considered such other factors, including Section 6.01(c) of the Merger Agreement, as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with the Pioneer board’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the Pioneer board’s consent that the Pioneer management forecast was reasonably prepared on a basis reflecting the best then available estimates and judgments of the management of Pioneer. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of Pioneer and ExxonMobil or any of their respective subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on Pioneer or ExxonMobil or on the expected benefits of the Merger in any way meaningful to its analysis. Goldman Sachs also assumed that the Merger will be consummated on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion does not address the underlying business decision of Pioneer to engage in the Merger or the relative merits of the Merger as compared to any strategic alternatives that may be available to Pioneer; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, Pioneer or any other alternative transaction. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to the holders (other than ExxonMobil and its affiliates) of Pioneer

 

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common stock, as of the date of its opinion, of the Merger Consideration to be paid to such holders pursuant to the Merger Agreement. Goldman Sachs does not express any view on, and its opinion does not address, any other term or aspect of the Merger Agreement or the Merger or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger, including the fairness of the Merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of Pioneer; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Pioneer, or class of such persons, in connection with the Merger, whether relative to the Merger Consideration to be paid to the holders (other than ExxonMobil and its affiliates) of Pioneer common stock pursuant to the Merger Agreement or otherwise. Goldman Sachs does not express any opinion as to the prices at which ExxonMobil common stock or Pioneer common stock will trade at any time or as to the potential effects of volatility in the credit, financial and stock markets on Pioneer, ExxonMobil or the Merger, or as to the impact of the Merger on the solvency or viability of Pioneer or ExxonMobil or the ability of Pioneer or ExxonMobil to pay their respective obligations when they come due. Goldman Sachs’ opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of its opinion and Goldman Sachs assumes no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

Summary of Financial Analyses

The following is a summary of the material financial analyses delivered by Goldman Sachs to the Pioneer board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. In connection with its opinion, Goldman Sachs considered, among other things, Section 6.01(c) of the Merger Agreement, pursuant to which Pioneer shall reduce the variable component of its regular quarterly dividend per share of Pioneer common stock beginning in the fourth quarter of 2023 until the consummation of the Merger, which reduction is estimated to be $6.14 per share of Pioneer common stock accounting for the period beginning in the fourth quarter of 2023 through June 30, 2024 as provided by the management of Pioneer and approved for Goldman Sachs’ use by Pioneer. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before October 9, 2023, the last day before the date on which the Pioneer board approved the Merger and is not necessarily indicative of current market conditions.

Illustrative Discounted Cash Flow Analysis

Using the Pioneer management forecast, Goldman Sachs performed an illustrative discounted cash flow analysis on Pioneer to derive a range of illustrative equity values per share of Pioneer common stock. Using discount rates ranging from 9.5% to 10.5%, reflecting estimates of Pioneer’s weighted average cost of capital, Goldman Sachs discounted to present value as of September 30, 2023 (i) estimates of unlevered free cash flow for Pioneer for the period from October 1, 2023 to December 31, 2027, as reflected in the Pioneer management forecast and (ii) a range of illustrative terminal values for Pioneer, which were calculated by applying a range of next twelve month (“NTM”) earnings before interest, taxes, depletion, depreciation, amortization and exploration (“EBITDAX”) multiples ranging from 5.0x to 6.5x, to an estimate of Adjusted EBITDAX to be generated by Pioneer in calendar year 2028, as reflected in the Pioneer management forecast (which analysis implied perpetuity growth rates ranging from 1.3% to 4.0%). The range of NTM EBITDAX multiples was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account historical trading multiples of Pioneer, ExxonMobil and certain publicly traded companies, as described below in the section captioned “Selected Publicly Traded Companies Trading Multiples”. Goldman Sachs derived such discount rates

 

69

by application of the Capital Asset Pricing Model (“CAPM”), which requires certain company-specific inputs, including Pioneer’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for Pioneer, as well as certain financial metrics for the United States financial markets generally.

Goldman Sachs derived a range of illustrative enterprise values for Pioneer by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for Pioneer the amount of Pioneer’s net debt calculated as total debt (including the impact of finance lease liabilities and assumed cash settlement of outstanding convertible notes), less cash, cash equivalents and investments in affiliates, as provided by the management of Pioneer and approved for Goldman Sachs’ use by Pioneer, to derive a range of illustrative equity values for Pioneer. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted shares of Pioneer common stock outstanding, as provided by the management of Pioneer and approved for Goldman Sachs’ use by Pioneer, to derive a range of illustrative equity values per share of Pioneer common stock of $207.34 to $262.40.

Illustrative Present Value of Future Share Price Analysis

Using the Pioneer management forecast, Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Pioneer common stock. For this analysis, Goldman Sachs first calculated the implied enterprise value for Pioneer as of December 31 for each of the calendar years 2024 through 2026, by applying a range of illustrative enterprise value to NTM EBITDAX multiples (referred to in this section as “EV/NTM EBITDAX”) of 5.0x to 6.5x to estimates of Pioneer’s NTM Adjusted EBITDAX for each of the calendar years 2024 through 2026. This illustrative range of EV/NTM EBITDAX multiple estimates was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical EV/NTM EBITDAX multiples for Pioneer, ExxonMobil and certain publicly traded companies, as described below in the section captioned “Selected Publicly Traded Companies Trading Multiples”.

Goldman Sachs then subtracted the amount of Pioneer’s net debt calculated as total debt (including the impact of finance lease liabilities and assumed cash settlement of outstanding convertible notes), less cash, cash equivalents and investments in affiliates for each of the calendar years 2024 through 2026, as provided by the management of Pioneer and approved for Goldman Sachs’ use by Pioneer, from the respective implied enterprise values in order to derive a range of illustrative equity values as of December 31 for Pioneer for each of the calendar years 2024 through 2026. Goldman Sachs then divided these implied equity values by the projected year-end number of fully diluted outstanding shares of Pioneer common stock for each of the calendar years 2024 through 2026, calculated using information provided by the management of Pioneer and approved for Goldman Sachs’ use by Pioneer, to derive a range of implied future values per share of Pioneer common stock (excluding dividends). By applying an illustrative discount rate of 10.5%, reflecting an estimate of Pioneer’s cost of equity, and, for the dividends only, using a mid-year convention, Goldman Sachs discounted to present value as of September 30, 2023 both the theoretical future values per share it derived for Pioneer and the estimated dividends to be paid per share of Pioneer common stock. Goldman Sachs derived such discount rate by application of the CAPM, which requires certain company-specific inputs, including a beta for Pioneer, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied equity values per share of Pioneer common stock of $208.99 to $274.83.

 

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Selected Precedent Transactions Premia Analysis

Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia paid in certain acquisition transactions listed below announced since December 31, 2019 involving U.S. publicly traded target companies in the oil and gas exploration and production industry with a transaction value of greater than $3 billion. With respect to each of these transactions, Goldman Sachs calculated the implied premium of the price paid in the transaction relative to the last undisturbed closing share price of the target company prior to the announcement of the transaction. The following table presents the results of this analysis:

 

Announcement Date		Acquiror		Target		Premium to Last Undisturbed Closing Share Price
8/21/23		Permian Resources Corporation		Earthstone Energy, Inc.			14.8	%
10/19/20		ConocoPhillips		Concho Resources Inc.			11.7	%
5/22/23		Chevron Corporation		PDC Energy, Inc.			10.6	%
10/20/20		Pioneer		Parsley Energy, Inc.			7.9	%
7/20/20		Chevron Corporation		Noble Energy, Inc.			7.6	%
9/28/20		Devon Energy Corporation		WPX Energy, Inc.			2.6	%
5/24/21		Coterra Energy, Inc. (f/k/a Cabot Oil and Gas Corporation)		Cimarex Energy Co.			0.4	%
3/7/22		Oasis Petroleum Inc.		Whiting Petroleum Corporation			(2.9	)%

Although none of the selected transactions is directly comparable to the Merger, the target companies in the selected transactions were companies with certain operations or financial characteristics that, for the purposes of analysis, may be considered similar to certain of Pioneer’s operations or financial characteristics, and as such, for purposes of analysis, the selected transactions may be considered similar to the Merger.

Based on Goldman Sachs’ review of the foregoing data and its professional judgment and experience, Goldman Sachs applied a reference range of illustrative premia of (2.9)% to 14.8% to the closing price per share of Pioneer common stock on October 5, 2023 of $214.96. This analysis resulted in a range of implied equity values per share of Pioneer common stock of $208.73 to $246.77.

Selected Publicly Traded Companies Trading Multiples

Goldman Sachs reviewed and compared certain financial information of Pioneer to corresponding publicly available financial information and valuation multiples for ExxonMobil and the following publicly traded companies in the oil and gas exploration and production industry, which are referred to in this section as the “selected companies”:

 

•

ConocoPhillips;

 

•

Devon Energy Corporation;

 

•

Diamondback Energy, Inc.;

 

•

EOG Resources, Inc.; and

 

•

Occidental Petroleum Corporation.

Although none of the selected companies are directly comparable to Pioneer, the selected companies were chosen because they are publicly traded companies in the oil and gas exploration and production industry with certain operations or financial characteristics that, for purposes of analysis, may be considered similar to certain operations or financial characteristics of Pioneer.

For each of Pioneer and, using publicly available information, ExxonMobil and the selected companies, Goldman Sachs calculated and compared (i) the EV/NTM EBITDAX multiple of the closing price per share as of

 

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October 5, 2023 and (ii) the average of EV/NTM EBITDAX multiples for the six-month, one-year, two-year and three-year periods ended October 5, 2023 (which is referred to in the table below as “L6M,” “LTM,” “L2Y” and “L3Y” respectively).

The results of these calculations are summarized as follows:

 

EV/NTM EBITDAX

Average EV/NTM EBITDAX

L6M

LTM

L2Y

L3Y

Pioneer

5.6x

6.0x

5.8x

5.6x

5.4x

ExxonMobil

6.5x

6.2x

5.9x

5.7x

6.3x

Selected Companies Median

5.0x

5.3x

5.1x

4.9x

5.1x

General

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Pioneer or ExxonMobil or the Merger.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the Pioneer board as to the fairness from a financial point of view of the Merger Consideration to be paid to the holders (other than ExxonMobil and its affiliates) of Pioneer common stock. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Pioneer, ExxonMobil, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The Merger Consideration was determined through arm’s-length negotiations between Pioneer and ExxonMobil and was approved by the Pioneer board. Goldman Sachs provided advice to Pioneer during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to Pioneer or its board or that any specific amount of consideration constituted the only appropriate consideration for the Merger.

As described above, Goldman Sachs’ opinion to the Pioneer board was one of many factors taken into consideration by the Pioneer board in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

Goldman Sachs and its affiliates are engaged in advisory, underwriting, lending and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Pioneer, ExxonMobil, any of their respective affiliates and third parties or any currency or commodity that may be involved in the Merger.

 

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Goldman Sachs acted as financial advisor to Pioneer in connection with, and participated in certain of the negotiations leading to, the Merger. Goldman Sachs has provided certain financial advisory and/or underwriting services to Pioneer and its affiliates from time to time for which Goldman Sachs Investment Banking has received, and may receive, compensation, including having acted as a joint book-running manager with respect to a public offering of Pioneer’s senior notes, in March 2023. During the two-year period ended October 10, 2023, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by Goldman Sachs Investment Banking to Pioneer and/or its affiliates of approximately $0.2 million. During the two-year period ended October 10, 2023, Goldman Sachs Investment Banking has not been engaged by ExxonMobil or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to Pioneer, ExxonMobil and their respective affiliates, for which Goldman Sachs Investment Banking may receive compensation.

In connection with the issuance of Pioneer’s 0.250% convertible senior notes due 2025 (the “Convertible Notes”), Pioneer entered into capped call transactions with respect to the Convertible Notes (collectively, the “Capped Call Transactions”) with Goldman Sachs and other counterparties (collectively, the “Capped Call Counterparties”), each acting as principal for its own account, consisting of the purchase by Pioneer of capped call options with respect to collectively approximately 12,047,710 shares of Pioneer common stock, the aggregate number of shares of Pioneer common stock underlying the Convertible Notes (with 25% purchased from Goldman Sachs). The Capped Call Transactions initially had a strike price of $109.7719 per share of Pioneer common stock, which is equal to the conversion price of the Convertible Notes based on the initial conversion rate of 9.1098 shares of Pioneer common stock per $1,000 in principal amount of the Convertible Notes, subject to an initial cap price of $156.2140 per share of Pioneer common stock. As of November 13, 2023, Capped Call Transactions with respect to 544,900 shares of Pioneer common stock remain outstanding, with an adjusted strike price of $93.1281 per share of Pioneer common stock and an adjusted cap price of $132.5285 per share of Pioneer common stock.

The Capped Call Transactions were intended to offset a portion of the potential dilutive effect on holders of Pioneer common stock of the conversion of the Convertible Notes and/or any potential cash payment in excess of the principal amount of the Convertible Notes that Pioneer may make in connection with a cash settlement of the Convertible Notes, in each case, up to the cap price. The Capped Call Transactions, upon exercise thereof, generally require the Capped Call Counterparties to deliver to Pioneer a number of shares of Pioneer common stock (and/or in certain circumstances, at Pioneer’s election, cash) determined based on the excess, if any, of the lower of the cap price and the price per share of Pioneer common stock at that time (determined over a period specified in the Capped Call Transactions) over the strike price per share of Pioneer common stock.

The Capped Call Transactions may be adjusted, exercised, canceled and/or terminated in accordance with their terms in connection with certain events, including the announcement or consummation of the Merger, which could result in a payment from Goldman Sachs to Pioneer. In particular, under the terms of the Capped Call Transactions, Goldman Sachs and the other Capped Call Counterparties, each acting separately as the calculation agent under the Capped Call Transactions to which it is a party, is entitled in certain circumstances to make adjustments to the terms of such Capped Call Transactions that reflect the economic effect of the announcement of the Merger on the embedded call options. In addition, each of Goldman Sachs and the other Capped Call Counterparties may, acting separately as the calculation agent, determining party or otherwise as principal under the Capped Call Transactions to which it is a party, determine such adjustments in respect of such Capped Call Transactions in accordance with their terms, including on or following consummation or abandonment of the Merger. All actions or exercises of judgment by Goldman Sachs, in its capacity as calculation agent, pursuant to the terms of the Capped Call Transactions to which it is a party, must be performed in good faith and a commercially reasonable manner.

As a result of the Capped Call Transactions, the Capped Call Counterparties are expected to have market exposure to the price of Pioneer common stock. It is the ordinary practice of the Capped Call Counterparties to engage in hedging activities to limit their respective market exposure to the price of the stock underlying

 

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privately negotiated equity derivative transactions with issuers of such stock, such as the Capped Call Transactions. In connection with the Capped Call Transactions to which it is a party, Goldman Sachs (and its respective affiliates) have engaged, and will continue to engage, in accordance with applicable law, in hedging and other market transactions (which may include the entering into or unwinding of various derivative transactions with respect to Pioneer common stock) that are generally intended to substantially neutralize Goldman Sachs’ exposure as a result of the Capped Call Transactions to which it is a party to changes in the price of Pioneer common stock. Such hedging activity is at Goldman Sachs’ own risk and may result in a gain or loss to Goldman Sachs that may be greater than or less than the initial expected contractual benefit to Goldman Sachs under the Capped Call Transactions to which it is a party. The amount of any such gain or loss will not be known until the applicable Capped Call Transactions have been exercised, expired or terminated in accordance with their terms and Goldman Sachs shall have completed all of its hedge unwind activities. To mitigate the exposure from the Capped Call Transactions, as of the close of business on November 13, 2023, Goldman Sachs held a net long economic position of approximately 81,785 shares of Pioneer common stock and was long and short a number of various other options on Pioneer common stock.

Goldman Sachs provided to management of Pioneer, for the information of the Pioneer board, materials that summarized, based on theoretical models, the potential effects of the announcement and of the consummation of the Merger on the Capped Call Transactions to which Goldman Sachs is a counterparty. The materials included preliminary illustrative analyses by Goldman Sachs’ Investment Banking Division for a range of stated assumptions regarding takeout prices for Pioneer common stock and volatilities, as well as based on other reasonable assumptions. In accordance with industry practice, Goldman Sachs maintains customary institutional information barriers reasonably designed to prevent the unauthorized disclosure of confidential information by personnel in its Investment Banking Division to the personnel in its Securities Division who are undertaking hedging and other market transactions with respect to Goldman Sachs’ Capped Call Transactions. In connection with the preparation of presentations to senior management of Pioneer and the Pioneer board, personnel in Goldman Sachs’ Investment Banking Division, including the representatives of Goldman Sachs who have advised Pioneer in connection with the Merger, from time to time, have received or may receive input from personnel in Goldman Sachs’ Securities Division into how to model, or reports of historical measures or estimates of, Goldman Sachs’ and/or Goldman Sachs’ Investment Banking Division’s profit and/or loss over certain measurement periods related to the Capped Call Transactions.

Goldman Sachs has advised Pioneer that as of November 13, 2023, Goldman Sachs expected to realize a net gain of up to approximately $5 million with respect to the Capped Call Transactions as a result of the Merger, after giving effect to its hedging activities based on the ordinary hedging practices described above and based on a range of stated assumptions, including volatilities and other reasonable assumptions. The amount of any such gain will not be known until the Capped Call Transactions have been exercised, expired or terminated in accordance with their terms and Goldman Sachs and its affiliates have completed all of their unwind activities, and such amount may differ from the estimates provided above.

The indenture governing the Convertible Notes and the confirmations containing the terms of the Capped Call Transactions were included as exhibits to Pioneer’s Current Report on Form 8-K filed with the SEC on May 15, 2020, which contains additional disclosure regarding the Convertible Notes and a description of the Capped Call Transactions. All references in this section titled “ —Opinion of Pioneer’s Financial Advisor—General” to share counts, conversion prices, cap prices and strike prices are subject to adjustment from time to time in accordance with the terms of the confirmations relating to the Capped Call Transactions.

The Pioneer board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. Pursuant to a letter agreement dated October 6, 2023, Pioneer engaged Goldman Sachs to act as its financial advisor in connection with the Merger. The engagement letter between Pioneer and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement of the Merger, to be approximately $46 million, $2 million of which became payable at announcement of the Merger,

 

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and the remainder of which is contingent upon consummation of the Merger. In addition, Pioneer has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

REGULATORY APPROVALS REQUIRED FOR THE MERGER

Completion of the Merger is conditioned upon the receipt of certain governmental clearances or approvals, including the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act. The process for obtaining the requisite regulatory approvals for the Merger is ongoing.

Although ExxonMobil and Pioneer currently believe they should be able to obtain all required regulatory approvals in a timely manner, the parties cannot be certain when or if they will obtain them or, if obtained, whether the approvals will contain terms, conditions or restrictions not currently contemplated that will be detrimental to ExxonMobil after the completion of the Merger, or will contain a Burdensome Condition (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus for the definition of Burdensome Condition).

The approval of an application for regulatory approval means only that the regulatory criteria for approval have been satisfied or waived. It does not mean that the approving regulatory authority has determined that the consideration to be received by holders of Pioneer stock and/or the Merger is fair to Pioneer stockholders. Regulatory approval does not constitute an endorsement or recommendation of the Merger by any regulatory authority.

U.S. Antitrust Filing

Under the HSR Act, certain transactions, including the Merger, may not be completed unless certain waiting period requirements have expired or been terminated. The HSR Act provides that each party must file its respective HSR notifications with the FTC and the DOJ. A transaction notifiable under the HSR Act may not be completed until the expiration or termination of a 30-day waiting period following the parties’ filings of their respective HSR notifications or the termination of that waiting period. If the DOJ or FTC issues a second request prior to the expiration of this initial 30-day waiting period, the transaction cannot close until the parties observe a second waiting period, which is 30 days by statute, but that can be extended through agreement and would begin to run only after both parties have substantially complied with the second request, unless such second waiting period is terminated earlier.

The parties’ HSR notifications were filed with the FTC and the DOJ on November 3, 2023. On December 4, 2023, ExxonMobil and Pioneer each received a second request from the FTC in connection with the FTC’s review of the Merger. The effect of the second request is to extend the waiting period imposed by the HSR Act until 30 days after each of ExxonMobil and Pioneer has substantially complied with the second request issued to it, unless that period is extended voluntarily by the parties or terminated sooner by the FTC. ExxonMobil and Pioneer continue to work constructively with the FTC in its review of the Merger and continue to expect that the Merger will be completed in the first half of 2024, subject to the fulfillment of the closing conditions, including receipt of required regulatory approvals and approval of Pioneer’s stockholders.

At any time before or after the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act, or before or after the Merger is completed, the DOJ or the FTC may take action under the antitrust laws in opposition to the Merger, including seeking to enjoin completion of the Merger, to rescind the Merger or to conditionally permit completion of the Merger subject to regulatory concessions or conditions. In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the Merger or permitting completion subject to regulatory concessions or conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances.

 

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Although neither ExxonMobil nor Pioneer believes that the Merger will violate the antitrust laws, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

SEC Clearance of Registration Statement

The completion of the Merger is conditioned on the registration statement of which this proxy statement/prospectus is a part being declared effective and the absence of any stop order suspending the effectiveness of the registration statement or proceedings for such purpose pending before or threatened by the SEC.

NYSE Listing

Pursuant to the Merger Agreement, the shares of ExxonMobil common stock to be issued in the Merger must have been approved for listing on the NYSE, subject to official notice of issuance prior to the completion of the Merger.

Other Governmental Approvals

ExxonMobil and Pioneer are not aware of any material governmental approvals or actions that are required for completion of the Merger other than those described above. If any such additional governmental approvals or actions are required, ExxonMobil and Pioneer will use their respective reasonable best efforts, subject to certain limitations, to obtain any such approvals or actions from any governmental authority that are required under applicable law in order to consummate the transactions contemplated by the Merger Agreement. There can be no assurance, however, that any additional approvals or actions will be obtained.

Efforts to Obtain Regulatory Approvals

ExxonMobil and Pioneer have agreed in the Merger Agreement to use their respective reasonable best efforts, subject to certain limitations, to make the required governmental filings or obtain the required governmental authorizations, as the case may be, to complete the Merger. However, ExxonMobil’s obligation to use reasonable best efforts to obtain regulatory approvals required to complete the Merger does not require ExxonMobil to:

 

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sell, divest or discontinue any portion of the assets, liabilities, activities, businesses or operations of ExxonMobil, Pioneer or their respective subsidiaries existing prior to the effective time; or

 

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accept any other remedy with respect to ExxonMobil’s, Pioneer’s or any of their respective subsidiaries’ assets, liabilities, activities, businesses or operations;

in either case of the bullets above, that would reasonably be expected to, either individually or in the aggregate, have a material adverse effect on the business, financial condition or results of operations of ExxonMobil, Pioneer and their respective subsidiaries, taken as a whole; provided, however, that for this purpose, ExxonMobil, Pioneer and their respective subsidiaries, taken as a whole, will be deemed a consolidated group of entities of the size and scale of a hypothetical company that is 100% of the size of Pioneer and its subsidiaries, taken as a whole, as of the date of the Merger Agreement.

In addition, subject to the bullets above, ExxonMobil and Pioneer have agreed to use their reasonable best efforts to resist, defend against, lift or rescind the entry of any injunction or restraining order or other order of any governmental authority, and will defend and contest any litigation that may be pursued by any governmental authority seeking an order or decision, prohibiting the parties from consummating the transactions contemplated by the Merger Agreement in accordance with the terms thereof.

These requirements are described in more detail under “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus.

 

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No Assurances of Obtaining Approvals

There can be no assurances that any of the regulatory approvals described above will be obtained and, if obtained, there can be no assurance as to the timing of such approvals, the ability to obtain such approvals on satisfactory terms or the absence of any litigation challenging such approvals.

Timing

Subject to certain conditions, either ExxonMobil or Pioneer may terminate the Merger Agreement if the Merger is not completed on or before the initial end date (October 10, 2024) or, if either ExxonMobil or Pioneer has elected to extend the initial end date to April 10, 2025 as described under “The Merger Agreement—Termination of the Merger Agreement” beginning on page 103 of this proxy statement/prospectus, the Merger is not completed on or before the extended end date. See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 103 of this proxy statement/prospectus.

NO DISSENTERS’ OR APPRAISAL RIGHTS

Pioneer stockholders are not entitled to dissenters’ or appraisal rights in connection with the Merger.

Appraisal rights are statutory rights that enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the transaction.

Holders of shares of Pioneer common stock will not have rights to an appraisal of the fair value of their shares. Under Delaware law, appraisal rights are not available for the shares of any class or series if the shares of the class or series are listed on a national securities exchange or held of record by more than 2,000 holders on the record date, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash proceeds from the sale of fractional shares or fractional depositary receipts or any combination of the foregoing. Shares of Pioneer common stock are listed on the NYSE as of the record date, and Pioneer stockholders will receive ExxonMobil common shares pursuant to the Merger Agreement and cash proceeds from the sale of fractional shares. Approval for the listing of the shares of ExxonMobil common stock on the NYSE is a condition to completion of the Merger.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and ExxonMobil and Pioneer intend to report the Merger consistent with such qualification. Each of ExxonMobil and Pioneer has agreed in the Merger Agreement to use its best efforts (i) to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) not to, and not to permit or cause any of its respective subsidiaries or affiliates to, take or cause to be taken, or fail to take or cause to be taken, any action, which action, failure or cessation, could reasonably be expected to cause the Merger to fail to or cease to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Exxon has received from Davis Polk, and Pioneer has received from Gibson Dunn, an opinion to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. These opinions of counsel are based on customary assumptions and representations, covenants and undertakings of ExxonMobil, Pioneer and Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or otherwise is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Merger could differ materially from those described in this proxy statement/prospectus. The receipt of a tax opinion from counsel is not a condition to either party’s obligation to complete the Merger. ExxonMobil and Pioneer have not sought, and do not intend to seek, any ruling from the IRS regarding the qualification of the

 

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Merger as a “reorganization” within the meaning of Section 368(a) of the Code. As a result, there can be no assurance that the IRS will agree with the opinions or would not assert, or that a court would not sustain, a position contrary to the treatment of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, U.S. holders (as defined in “U.S. Federal Income Tax Consequences of the Merger”) generally will not recognize gain or loss for U.S. federal income tax purposes, except with respect to cash proceeds from the sale of fractional shares of ExxonMobil common stock. If the Merger does not qualify as a “reorganization,” the Merger generally would be a taxable transaction to U.S. holders, and each U.S. holder generally would recognize gain or loss in an amount equal to the difference, if any, between (i) the sum of the fair market value of the ExxonMobil common stock it receives in the Merger plus the amount of any cash proceeds from the sale of fractional shares of ExxonMobil common stock and (ii) such holder’s adjusted tax basis in its shares of Pioneer common stock exchanged in the Merger.

The U.S. federal income tax consequences described above may not apply to all holders of Pioneer common stock. You should read “U.S. Federal Income Tax Consequences of the Merger” beginning on page 106 of this proxy statement/prospectus for a more complete discussion of the U.S. federal income tax consequences of the Merger. Tax matters can be complicated and the tax consequences of the Merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the Merger to you.

ACCOUNTING TREATMENT

The Merger will be accounted for as an acquisition of a business. ExxonMobil will record the net tangible and identifiable intangible assets acquired and liabilities assumed from Pioneer at their respective fair values as of the closing date of the Merger. Any excess of the purchase price over the net assets acquired will be recorded as goodwill. The purchase price will be based on the closing date fair value of consideration paid by ExxonMobil, primarily ExxonMobil’s common stock to be issued to Pioneer stockholders, in connection with the Merger.

The financial condition and results of operations of ExxonMobil after completion of the Merger will reflect Pioneer’s balances and results after completion of the transaction but will not be restated retroactively to reflect the historical financial condition or results of operations of Pioneer. The earnings of ExxonMobil following the completion of the Merger will include the effect of changes in the carrying value of assets and liabilities. Goodwill and intangible assets with indefinite useful lives will not be amortized, but will be tested for impairment at least annually, and all assets (including goodwill) will be tested for impairment when certain indicators are present. If, in the future, ExxonMobil determines that tangible or intangible assets (including goodwill) are impaired, ExxonMobil would record an impairment charge at that time.

LISTING OF SHARES OF EXXONMOBIL COMMON STOCK AND DELISTING AND DEREGISTRATION OF SHARES OF PIONEER STOCK

ExxonMobil will take all necessary action to cause the shares of ExxonMobil common stock to be issued in connection with the Merger to be listed on the NYSE, where shares of ExxonMobil common stock are currently traded. If the Merger is completed, shares of Pioneer stock will no longer be listed on the NYSE and will be deregistered under the Exchange Act.

LITIGATION RELATING TO THE MERGER

Since the public announcement of the Merger, two putative stockholder lawsuits related to the Merger have been filed.

As of December 22, 2023, two complaints have been filed by purported Pioneer stockholders in the United States District Court for the Southern District of New York against Pioneer and the members of the Pioneer

 

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board. The lawsuits are captioned Schwarz v. Pioneer Natural Resources Company et al., Docket No. 1:23-cv-10915 and McCall v. Pioneer Natural Resources Company et al., Docket No. 1:23-cv-10936 (collectively, the “lawsuits”). The lawsuits allege, among other things, that the registration statement on Form S-4 of which this proxy statement/prospectus forms a part fails to disclose certain allegedly material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 under the Exchange Act. The lawsuits seek injunctive relief enjoining the Merger, damages and costs, and other remedies.

Pioneer has also received letters from additional purported Pioneer stockholders who contend that the registration statement on Form S-4 of which this proxy statement/prospectus forms a part fails to disclose certain allegedly material information and demands that Pioneer make supplemental disclosures. Pioneer has also received a letter from a purported Pioneer stockholder seeking access to certain books and records of Pioneer pursuant to Section 220 of the DGCL in connection with the Merger.

While Pioneer believes that the contentions made in each of the lawsuits and letters described above are without merit, each of these matters is at a preliminary stage and defendants have not yet answered or otherwise responded to the complaints or letters. It is possible that additional, similar complaints may be filed, and that additional, similar letters may be received by Pioneer, regarding the Merger. Absent new or different allegations that are material or constitute a disclosure obligation under the U.S. federal securities laws, Pioneer will not necessarily disclose such additional complaints or letters. Litigation is inherently uncertain, and there can be no assurance regarding the likelihood that Pioneer’s defense of the lawsuits (or any other lawsuits related to the Merger that may be filed in the future) will be successful, nor can Pioneer predict the amount of time and expense that will be required to resolve the lawsuits.

 

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THE MERGER AGREEMENT

The following is a summary of the material terms and conditions of the Merger Agreement. This summary may not contain all the information about the Merger Agreement that is important to you. This summary is qualified in its entirety by reference to the Merger Agreement attached as Annex A to, and incorporated by reference into, this proxy statement/prospectus. You are encouraged to read the Merger Agreement in its entirety because it is the legal document that governs the Merger.

EXPLANATORY NOTE

The Merger Agreement and the summary of its terms and conditions in this proxy statement/prospectus have been included to provide information about the terms and conditions of the Merger Agreement. The Merger Agreement and the summary of its terms and conditions are not intended to provide any other factual information about ExxonMobil, Merger Sub, Pioneer or any of their respective subsidiaries or affiliates. The representations, warranties, covenants and agreements contained in the Merger Agreement: were made by ExxonMobil, Merger Sub and Pioneer only for purposes of the Merger Agreement and as of specific dates; were made solely for the benefit of the parties to the Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures; may not have been intended to be statements of fact, but rather, as a method of allocating contractual risk and governing the contractual rights and relationships between the parties to the Merger Agreement; and may be subject to standards of materiality applicable to contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of ExxonMobil, Merger Sub, Pioneer or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, covenants and agreements may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in ExxonMobil’s or Pioneer’s public disclosures.

For the foregoing reasons, the representations, warranties, covenants and agreements in the Merger Agreement and any description of those provisions in this proxy statement/prospectus should be read only in conjunction with the other information provided elsewhere in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus.

STRUCTURE OF THE MERGER

The Merger Agreement provides for a transaction in which Merger Sub will merge with and into Pioneer, upon the terms and subject to the conditions set forth in the Merger Agreement. Pioneer will be the Surviving Corporation in the Merger and will, following completion of the Merger, be a wholly owned subsidiary of ExxonMobil.

After completion of the Merger, the certificate of incorporation of the Surviving Corporation will be amended and restated as set forth in Exhibit A to the Merger Agreement and the bylaws of the Surviving Corporation will be amended and restated as set forth in Exhibit B to the Merger Agreement, in each case, until amended in accordance with applicable law.

After completion of the Merger, the directors and officers of Merger Sub at the effective time of the Merger will be the directors and officers, respectively, of the Surviving Corporation, in each case, until their successors are duly elected or appointed and qualified in accordance with applicable law.

COMPLETION AND EFFECTIVENESS OF THE MERGER

The Merger will be completed and become effective at such time as a certificate of merger with respect to the Merger is duly filed with the Delaware Secretary of State (or at such later time as agreed to by ExxonMobil

 

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and Pioneer and specified in such certificate of merger). Unless another date and time are agreed to by ExxonMobil and Pioneer, completion of the Merger will occur as soon as possible, but in any event no later than four business days following the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to completion of the Merger (other than those conditions that by their nature are to be satisfied at completion of the Merger, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the time of completion of the Merger) described under “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 85 of this proxy statement/prospectus.

Assuming receipt of required regulatory approvals and timely satisfaction of other closing conditions, including the approval by Pioneer’s stockholders of the Merger Agreement Proposal, ExxonMobil and Pioneer expect that the Merger will be completed in the first half of 2024. There can be no assurances as to when, or if, the Merger will occur. Subject to certain conditions, either ExxonMobil or Pioneer may terminate the Merger Agreement if the Merger is not completed on or before the initial end date (October 10, 2024) or, if either ExxonMobil or Pioneer has elected to extend the initial end date to April 10, 2025, the Merger is not completed on or before the extended end date. The right to terminate the Merger Agreement after the initial end date or the extended end date, as applicable, will not be available to ExxonMobil or Pioneer, as applicable, if that party’s breach of any provision of the Merger Agreement resulted in the failure of the Merger to be completed by either the initial end date or the extended end date, as applicable. See “The Merger Agreement—Conditions to Completion of the Merger” and “The Merger Agreement—Termination of the Merger Agreement” beginning on pages 85 and 103, respectively, of this proxy statement/prospectus.

MERGER CONSIDERATION

At the completion of the Merger, each share of Pioneer common stock outstanding immediately prior to the effective time of the Merger (including the Pioneer Restricted Stock, but excluding shares of Pioneer common stock held (1) in treasury (excluding Pioneer common stock subject to or issuable in connection with a Pioneer employee benefit plan) or (2) by ExxonMobil or Merger Sub, which are to be cancelled at the effective time of the Merger) will automatically be converted into the right to receive 2.3234 shares of ExxonMobil common stock (with cash proceeds from the sale of any fractional shares as described under “The Merger Agreement—Fractional Shares” beginning on page 81 of this proxy statement/prospectus). As of the effective time of the Merger, all such shares of Pioneer common stock so converted will no longer be outstanding and will automatically be canceled and retired and will cease to exist, and will thereafter represent only the right to receive the Merger Consideration and the right to receive any dividends or other distributions pursuant to the Merger Agreement, subject to applicable law.

If, between the date of the Merger Agreement and the effective time of the Merger, any change in the outstanding shares of capital stock of ExxonMobil or Pioneer occurs as a result of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, respectively, or any stock dividend thereon with a record date during such period (but, for the avoidance of doubt, excluding any change that results from (i) the exercise of stock options or other equity awards to purchase shares of ExxonMobil common stock or Pioneer common stock (as disclosed in the Merger Agreement), (ii) the settlement of any other equity awards to purchase or otherwise acquire ExxonMobil common stock or Pioneer common stock or (iii) the grant of equity-based compensation to directors or employees of ExxonMobil or Pioneer (other than any such grants not made in accordance with the Merger Agreement) under ExxonMobil’s or Pioneer’s, as applicable, stock option or compensation plans or arrangements), the Merger Consideration and any other amounts payable pursuant to the Merger Agreement will be appropriately adjusted to provide the same economic effect as contemplated by the Merger Agreement prior to any such change.

FRACTIONAL SHARES

Each holder of shares of Pioneer common stock whose shares of Pioneer common stock were validly converted into the right to receive shares of ExxonMobil common stock and who would otherwise have been

 

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entitled to receive a fractional share of ExxonMobil common stock (after aggregating all shares of Pioneer common stock represented by the Certificates (as defined below) and Uncertificated Shares (as defined below) delivered by such holder) will receive from the exchange agent, in lieu thereof, cash (without interest) in an amount representing such holder’s proportionate interest in the net proceeds from the aggregation and sale by the exchange agent for the account of all such holders of fractional shares of ExxonMobil common stock which would otherwise be issued (the “Excess Shares”). The sale of the Excess Shares by the exchange agent will be executed on the NYSE within ten business days after the effective time of the Merger (or such shorter period as may be required by applicable law) and will be executed in round lots to the extent practicable. The proceeds resulting from the sale of the Excess Shares will be free of commission, transfer taxes and other out-of-pocket transaction costs. The net proceeds of such sale will be distributed to the holder of shares of Pioneer common stock entitled to receive a fractional share of ExxonMobil common stock (after aggregating all shares of Pioneer common stock represented by the Certificates and Uncertificated Shares delivered by such holder) with each such holder receiving an amount of such proceeds proportionate to the amount of fractional interests which such holder would otherwise have been entitled to receive.

GOVERNANCE MATTERS FOLLOWING COMPLETION OF THE MERGER

Prior to the completion of the Merger, ExxonMobil will take all necessary actions to cause Scott D. Sheffield, Pioneer’s current Chief Executive Officer, and one director of Pioneer who is selected by Pioneer and reasonably acceptable to ExxonMobil to be appointed to the ExxonMobil board immediately following the effective time of the Merger. In addition, as of the effective time of the Merger, ExxonMobil will appoint Richard P. Dealy as Pioneer’s lead representative on the integration and transition team established and maintained by ExxonMobil.

During the period from the effective time of the Merger until the two year anniversary thereof, (i) the Surviving Corporation’s headquarters will be located at Pioneer’s existing headquarters in Irving, Texas, and (ii) the Surviving Corporation will maintain an office in Midland, Texas that is comparable to Pioneer’s existing office in Midland, Texas.

From and after the effective time of the Merger, until successors are duly elected or appointed and qualified in accordance with applicable law, (a) the directors of Merger Sub at the effective time will be the directors of the Surviving Corporation and (b) the officers of Merger Sub at the effective time will be the officers of the Surviving Corporation.

PROCEDURES FOR SURRENDERING PIONEER STOCK CERTIFICATES

The conversion of shares of Pioneer common stock into the right to receive the Merger Consideration will occur automatically at completion of the Merger. Prior to completion of the Merger, ExxonMobil will appoint an exchange agent that is both a nationally recognized financial institution and also reasonably acceptable to Pioneer and enter into an exchange agent agreement with the exchange agent providing for the exchange agent to handle the exchange of shares of Pioneer common stock represented by certificates (each such certificate, a “Certificate”), and uncertificated shares of Pioneer stock (each such share, an “Uncertificated Share”), for the Merger Consideration. At or prior to the effective time of the Merger, ExxonMobil will deposit with or otherwise make available to the exchange agent, the Merger Consideration to be paid in respect of the Certificates, the Uncertificated Shares (other than the Pioneer Restricted Stock) and certain Pioneer equity awards that are held by non-employees of Pioneer (as provided under the terms of the Merger Agreement). ExxonMobil will also make available to the exchange agent, from time to time as needed, additional cash sufficient to pay any dividends or other distributions to which holders of shares of Pioneer common stock are entitled pursuant to the Merger Agreement. Within five business days after the effective time of the Merger, ExxonMobil will send, or will cause the exchange agent to send, to each holder of shares of Pioneer common stock at the effective time of the Merger (other than the Pioneer Restricted Stock), a letter of transmittal and instructions in customary form that is reasonably acceptable to Pioneer explaining how to surrender Certificates or transfer Uncertificated Shares to the exchange agent.

 

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Pioneer stockholders who submit a properly completed letter of transmittal, together with their Certificates (in the case of certificated shares of Pioneer common stock) or an “agent’s message” or other evidence of transfer requested by the exchange agent (in the case of a book-entry transfer of Uncertificated Shares), will receive the applicable Merger Consideration into which such shares of Pioneer common stock were converted in the Merger. The shares of ExxonMobil common stock constituting part of the Merger Consideration will be in book-entry form unless a physical certificate is required under applicable law.

After completion of the Merger, each Certificate that previously represented shares of Pioneer common stock and each Uncertificated Share will only represent the right to receive the Merger Consideration into which those shares of Pioneer common stock have been converted (and cash proceeds from the sale of any fractional shares of ExxonMobil common stock as described above under “Merger Agreement—Fractional Shares” beginning on page 81 of this proxy statement/prospectus), and any dividends on the shares of ExxonMobil common stock into which such shares of Pioneer common stock have been converted as described below under this “The Merger Agreement—Procedures for Surrendering Pioneer Stock Certificates”.

Neither ExxonMobil nor Pioneer will be responsible for payment of any transfer or other similar taxes and fees (including any penalties and interests) incurred solely by holders of shares of Pioneer common stock in connection with the Merger and other transactions contemplated under the Merger Agreement. The payment obligations of such transfer or other similar taxes and fees, if any, will be the sole responsibility of such Pioneer stockholders. In addition, if there is a transfer of ownership of Pioneer common stock that is not registered in the records of Pioneer’s transfer agent, payment of the Merger Consideration as described above (and cash proceeds from the sale of any fractional shares of ExxonMobil common stock as described under “The Merger Agreement—Fractional Shares” beginning on page 81 of this proxy statement/prospectus, and any dividends on the shares of ExxonMobil common stock into which such shares of Pioneer common stock have been converted as described below in this “The Merger Agreement—Procedures for Surrendering Pioneer Stock Certificates”) will be made to a person other than the person in whose name the Certificate or Uncertificated Share so surrendered is registered only if the Certificate is properly endorsed or otherwise is in proper form for transfer or the Uncertificated Share is properly transferred, and the person requesting such payment must pay to the exchange agent any transfer or other similar taxes required as a result of such payment or establish to the satisfaction of the exchange agent that any transfer or other similar taxes have been paid or are not payable.

After completion of the Merger, ExxonMobil will not pay dividends or other distributions with a record date on or after the effective time of the Merger to any holder of any Certificates or Uncertificated Shares with respect to the shares of ExxonMobil common stock comprising the Merger Consideration which the holder of shares of Pioneer common stock has the right to receive until the holder of such shares of Pioneer common stock surrenders the Certificates or transfers the Uncertificated Shares in accordance with the Merger Agreement. However, once those Certificates or Uncertificated Shares are surrendered or transferred, the exchange agent will promptly pay to the holder, without interest, any dividends or other distributions on the shares of ExxonMobil common stock comprising the Merger Consideration which the holder of shares of Pioneer common stock has the right to receive, with a record date on or after the effective time of the Merger that have been paid prior to such surrender or transfer, as applicable.

TREATMENT AND QUANTIFICATION OF PIONEER EQUITY AWARDS

Treatment of Pioneer RSUs

At or immediately prior to the effective time of the Merger, each Pioneer RSU (other than those granted on or after October 10, 2023 that remain unvested as of immediately prior to the effective time of the Merger) outstanding as of immediately prior to the effective time of the Merger will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer RSU, subject to applicable tax withholding.

Pioneer may grant annual equity awards in the form of Pioneer RSUs for any calendar year commencing with 2024 and prior to the effective time of the Merger covering up to 325,000 shares of Pioneer common stock

 

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in the aggregate per calendar year without the prior consent of ExxonMobil. Each Pioneer RSU granted on or after October 10, 2023 that is outstanding and remains unvested as of immediately prior to the effective time of the Merger will be converted into a number of ExxonMobil restricted stock units equal to the Merger Consideration, multiplied by the total number of shares of Pioneer common stock subject to such Pioneer RSU, and will continue vesting on the award’s existing vesting schedule, with pro-rata monthly acceleration provisions in the event of the holder’s termination of employment without cause, resignation for good reason, death, disability or normal retirement.

Treatment of Pioneer DSUs

At or immediately prior to the effective time of the Merger, each Pioneer DSU outstanding as of immediately prior to the effective time of the Merger will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer DSU, subject to applicable tax withholding.

Treatment of Pioneer Performance Units

At or immediately prior to the effective time of the Merger, each Pioneer Performance Unit outstanding as of immediately prior to the effective time of the Merger will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer Performance Unit (with the number of shares of Pioneer common stock subject to each Pioneer Performance Unit determined based on the maximum level of performance), and all dividend equivalents accrued in respect of shares of Pioneer common stock underlying each Pioneer Performance Unit will be paid in cash by Pioneer at the effective time of the Merger, in each case, subject to applicable tax withholding.

Treatment of Pioneer Restricted Stock

Immediately prior to the effective time of the Merger, each share of Pioneer Restricted Stock outstanding as of immediately prior to the effective time of the Merger will become fully vested, Pioneer will withhold a number of such shares necessary to satisfy any tax withholding, and the remainder of such shares will be converted into the right to receive the Merger Consideration.

Treatment of Pioneer Employee Stock Purchase Plan

No new participants will commence participation in the Pioneer Employee Stock Purchase Plan (the “Pioneer ESPP”) following October 10, 2023, and no participant in the Pioneer ESPP will increase his or her payroll contribution rate in effect as of the date of the Merger Agreement or make separate non-payroll contributions following the date of the Merger Agreement. The Pioneer ESPP will terminate no later than immediately prior to the effective time of the Merger.

Quantification of Pioneer Equity Awards

See “Interests of Pioneer’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers” beginning on page 115 of this proxy statement/prospectus for an estimate of the amounts that would become payable to each Pioneer named executive officer in respect of his or her unvested Pioneer RSUs, Pioneer Performance Units and Pioneer Restricted Stock. Based on the assumptions described below under “Interests of Pioneer’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers” beginning on page 115 of this proxy statement/prospectus, the estimated aggregate number of shares of ExxonMobil common stock that would become payable to (i) Pioneer’s five executive officers that are not named executive officers in respect of their unvested Pioneer RSUs, Pioneer Performance Units and Pioneer Restricted Stock is 326,601 (of which certain Pioneer RSUs and Pioneer Restricted Stock awards were accelerated and settled on December 15, 2023, as described under “Interests of Pioneer’s Directors and Executive Officers in the Merger—Treatment of Pioneer Equity Awards in the Merger” beginning on page 110 of this proxy statement/prospectus), and (ii) Pioneer’s 10 non-employee directors in respect of their unvested Pioneer RSUs is 23,214 and in respect of their Pioneer DSUs is 120,887.

 

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LISTING OF SHARES OF EXXONMOBIL COMMON STOCK

The Merger Agreement obligates ExxonMobil to use its reasonable best efforts to cause the shares of ExxonMobil common stock to be issued as part of the Merger Consideration to be listed on the NYSE, subject to official notice of issuance.

Approval for listing on the NYSE of the shares of ExxonMobil common stock issuable to Pioneer stockholders in the Merger, subject to official notice of issuance, is a condition to the obligations of ExxonMobil, Pioneer and Merger Sub to complete the Merger.

DIVIDENDS

After the date of the Merger Agreement and until the effective time of the Merger, each of ExxonMobil and Pioneer will coordinate with the other party regarding the timing of any declaration of any dividends in respect of ExxonMobil common stock and Pioneer common stock and the record dates and payment dates relating thereto, it being the agreement of the parties that holders of Pioneer common stock will not receive, for any quarter, dividends both in respect of Pioneer common stock and also dividends in respect of ExxonMobil common stock that they receive in exchange therefor in the Merger, but that they shall receive for any such quarter either: (a) only dividends in respect of Pioneer common stock or (b) only dividends in respect of ExxonMobil common stock that they receive in exchange therefor in the Merger. If Pioneer has declared and set a record date for a dividend permitted by the Merger Agreement, and the effective time of the Merger occurs after the record date for such dividend and prior to the payment date for such dividend, then (i) Pioneer will deposit the funds necessary to pay such dividend with the exchange agent prior to the effective time of the Merger and (ii) ExxonMobil will cause the Surviving Corporation to pay such dividend (and any applicable dividend equivalent rights to the extent any holder of a Pioneer equity award was entitled to such rights under the terms of a Pioneer equity award as in effect on the date Pioneer declared the applicable dividend) following the completion of the Merger on the scheduled payment date for such dividend.

CONDITIONS TO COMPLETION OF THE MERGER

Mutual Conditions to Completion

The obligation of each of ExxonMobil, Pioneer and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of a number of conditions, including the following:

 

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the absence of any injunction or order or applicable law preventing or making illegal the consummation of the Merger;

 

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the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the shares of Pioneer common stock outstanding and entitled to vote at the Special Meeting;

 

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the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act;

 

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the registration statement of which this proxy statement/prospectus is a part being declared effective and no stop order suspending the effectiveness of such registration statement being in effect and no proceedings for such purpose pending or threatened by the SEC; and

 

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the shares of ExxonMobil to be issued in the Merger having been approved for listing on the NYSE, subject to official notice of issuance.

 

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Additional Conditions to Completion for the Benefit of ExxonMobil and Merger Sub

In addition to the conditions of all parties’ obligations to complete the Merger, the obligation of each of ExxonMobil and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver by ExxonMobil) of the following conditions:

 

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performance in all material respects by Pioneer of each of its obligations under the Merger Agreement required to be performed by it at or prior to the effective time of the Merger;

 

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the accuracy of the representations and warranties made in the Merger Agreement by Pioneer as of the date of the Merger Agreement and as of the date of completion of the Merger, subject to certain materiality thresholds;

 

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the absence since the date of the Merger Agreement of any event, circumstance, development, occurrence, fact, condition, effect or change that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Pioneer’s condition, business, assets, or results of operations, with certain customary exceptions (see “The Merger Agreement—Definition of ‘Material Adverse Effect’” beginning on page 88 of this proxy statement/prospectus for the definition of material adverse effect);

 

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receipt of a certificate signed by an executive officer of Pioneer, dated as of the closing date, as to the satisfaction of the conditions described in the preceding three bullets; and

 

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(i) the absence of any injunction or order or applicable law preventing or making illegal the consummation of the Merger and (ii) the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act, in each case, without the imposition of a Burdensome Condition (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus for the definition of Burdensome Condition).

Additional Conditions to Completion for the Benefit of Pioneer

In addition to the conditions to all parties’ obligations to complete the Merger, the obligation of Pioneer to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver by Pioneer) of the following conditions:

 

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performance in all material respects by ExxonMobil and Merger Sub of each of their obligations under the Merger Agreement required to be performed by them at or prior to the effective time of the Merger;

 

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the accuracy of the representations and warranties made in the Merger Agreement by ExxonMobil and Merger Sub as of the date of the Merger Agreement and as of the date of completion of the Merger, subject to certain materiality thresholds;

 

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the absence since the date of the Merger Agreement of any event, circumstance, development, occurrence, fact, condition, effect or change that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on ExxonMobil’s condition, business, assets, or results of operations, with certain customary exceptions (see “The Merger Agreement—Definition of ‘Material Adverse Effect’” beginning on page 88 of this proxy statement/prospectus for the definition of material adverse effect); and

 

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receipt of a certificate signed by an executive officer of ExxonMobil, dated as of the closing date, as to the satisfaction of the conditions described in the preceding three bullets.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains a number of representations and warranties made by Pioneer, on the one hand, and ExxonMobil, on the other hand, made solely for the benefit of the other, and that are subject in some cases to exceptions and qualifications, including, among other things, as to materiality and material adverse

 

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effect (see “The Merger Agreement—Definition of ‘Material Adverse Effect’” beginning on page 88 of this proxy statement/prospectus for the definition of material adverse effect). Furthermore, the assertions embodied in those representations and warranties are qualified by information in the confidential disclosure schedules that the parties have exchanged in connection with signing the Merger Agreement. The confidential disclosure schedules to the Merger Agreement contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. The representations and warranties made by the parties in the Merger Agreement relate to and include, as applicable to such party, among other things:

 

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corporate existence, good standing and qualification to do business;

 

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due authorization, execution and validity of the Merger Agreement and the applicable ancillary agreements;

 

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governmental consents necessary to complete the transactions contemplated by the Merger Agreement;

 

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absence of any conflict with or violation or breach of organizational documents, laws or regulations or agreements as a result of the execution, delivery or performance of the Merger Agreement and completion of the Merger and the other transactions contemplated by the Merger Agreement;

 

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capitalization;

 

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subsidiaries;

 

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regulatory reports and filings and internal controls over financial reporting;

 

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financial statements;

 

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information provided by the applicable party for inclusion in disclosure documents to be filed with the SEC in connection with the Merger;

 

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conduct of business in the ordinary course of business consistent with past practice and absence of any event, circumstance, development, occurrence, fact, condition, effect or change that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the applicable party;

 

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absence of undisclosed material liabilities;

 

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insurance;

 

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absence of pending or threatened legal proceedings and investigations;

 

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compliance with laws, regulations, orders and permits;

 

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material contracts;

 

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tax matters;

 

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employees, employee benefit plans and labor matters;

 

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intellectual property and real property matters;

 

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environmental matters;

 

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oil and gas matters;

 

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certain stock ownership matters;

 

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absence of contracts or agreements with affiliates;

 

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absence of any undisclosed broker’s or finder’s fees payable in connection with the Merger;

 

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receipt of opinion from financial advisor; and

 

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inapplicability of anti-takeover statutes.

 

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The representations and warranties in the Merger Agreement do not survive the completion of the Merger.

See “The Merger Agreement—Explanatory Note” beginning on page 80 of this proxy statement/prospectus for additional information.

DEFINITION OF “MATERIAL ADVERSE EFFECT”

Many of the representations and warranties in the Merger Agreement are qualified by a “material adverse effect” standard with respect to the party making such representations and warranties.

For purposes of the Merger Agreement, “material adverse effect” means, with respect to ExxonMobil or Pioneer, any event, circumstance, development, occurrence, fact, condition, effect or change that is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to (i) the condition (financial or otherwise), business, assets, or results of operations of that party and its subsidiaries, taken as a whole, or (ii) the ability of that party to complete the transactions contemplated by the Merger Agreement, except, in the case of clause (i), to the extent arising or resulting from any of the following:

 

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any changes, developments or conditions after the date of the Merger Agreement in the general economic or political conditions in the United States, including in the financial, debt, credit, capital or securities markets, including changes in interest rates;

 

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any changes generally affecting the industries in which that party or any of its subsidiaries operate;

 

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any changes or proposed changes in applicable law or interpretations thereof or regulatory conditions or any changes in the enforcement thereof, including changes in tax law, interpretations and regulations after the date of the Merger Agreement;

 

•

any changes or proposed changes in GAAP or other accounting standards or interpretations thereof;

 

•

any changes in commodity prices, including the prices of natural gas, crude oil, refined petroleum products, other hydrocarbon products, natural gas liquids, carbon dioxide, methane, nitrous oxide, fluorinated and other “greenhouse” gases and other commodities;

 

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any acts of war (whether or not declared), hostilities, military actions or acts of terrorism, or any escalation or worsening of the foregoing;

 

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any weather conditions or acts of God (including storms, earthquakes, tsunamis, tornados, hurricanes, floods or other natural disasters or other comparable events);

 

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pandemic (including the COVID-19 pandemic);

 

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any change, in and of itself, in the market price or trading volume of that party’s securities; provided that the exception in this clause shall not prevent or otherwise affect a determination that any underlying event, circumstance, development, occurrence, fact, condition, effect or change that is the cause of such change has resulted in, or would reasonably be expected to result in, a material adverse effect to the extent not otherwise excluded from the definition of material adverse effect;

 

•

the negotiation, execution, announcement or performance of the Merger Agreement or the consummation of the Merger or the other transactions contemplated thereby, including the impact thereof on the relationships, contractual or otherwise, with employees, labor unions, financing sources, customers, suppliers, distributors, regulators, partners or other persons, or any action or claim made or brought by any of the current or former stockholders of that party (or on their behalf or on behalf of that party) against that party or any of its directors, officers or employees arising out of the Merger Agreement or the Merger or the other transactions contemplated thereby (it being understood that this clause will not apply to a breach of any representation or warranty related to the announcement or consummation of the transactions contemplated by the Merger Agreement);

 

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•

any failure of any of that party or any of its subsidiaries to meet, with respect to any period or periods, any internal or published projections, forecasts, estimates of earnings or revenues or business plans (but not the underlying facts or basis for such failure to meet projections, forecasts, estimates of earnings or revenues or business plans, which may be taken into account in determining whether there has been or would reasonably be expected to be a material adverse effect to the extent not otherwise excluded from the definition of material adverse effect);

 

•

any action taken by that party or any of its subsidiaries that is expressly required by the Merger Agreement or any action taken or omitted to be taken by Pioneer or any of its subsidiaries at the written request of ExxonMobil; or

 

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any action (including divestitures, hold separate arrangements, consent decrees, the termination, assignment, novation or modification of contracts or other business relationships, the acceptance of restrictions on business operations, the entry into other commitments and limitations) with respect to that party and its affiliates that is required by any governmental authority to provide its approval, consent, registration, permit, authorization, clearance, or other confirmation under applicable antitrust laws for the consummation of the transactions contemplated by the Merger Agreement, and litigation with respect to the foregoing (such actions, “Antitrust Actions”),

except, in the case of the first eight bullets in the immediately preceding list, to the extent that any such event, circumstance, development, occurrence, fact, condition, effect or change has a disproportionate adverse effect on that party and its subsidiaries, taken as a whole, relative to the adverse effect such event, circumstance, development, occurrence, fact, condition, effect or change has on other companies operating in the industries in which that party and its subsidiaries operate.

CONDUCT OF BUSINESS PENDING THE MERGER

In general, except (i) as required by applicable law, (ii) as otherwise required or expressly permitted by the Merger Agreement or (iii) as consented to by ExxonMobil in writing (such consent not to be unreasonably withheld, conditioned or delayed), and subject to certain exceptions and qualifications, from the date of the Merger Agreement until the effective time of the Merger, Pioneer and each of its subsidiaries are required to use commercially reasonable efforts to (i) conduct their business in the ordinary course of business in all material respects, (ii) preserve substantially intact its present business organization, (iii) comply in all material respects with applicable laws and its contracts and maintain in effect all necessary material permits, (iv) keep available the services of its directors, officers and key employees on commercially reasonable terms (other than for termination of employment services for cause) and (v) preserve satisfactory business relationships with its material customers, lenders, suppliers, lessors, lessees, working interest owners and others having material business relationships with it.

Without limiting the generality of the foregoing, except (i) as required by applicable law, (ii) as otherwise required or expressly permitted by the Merger Agreement or (iii) as consented to by ExxonMobil (such consent not to be unreasonably withheld, conditioned or delayed), and subject to certain exceptions and qualifications, from the date of the Merger Agreement until the effective time of the Merger, Pioneer and each of its subsidiaries are not permitted to, among other things:

 

•

with respect to Pioneer, amend its certificate of incorporation or bylaws (whether by merger, consolidation or otherwise);

 

•

enter into any new line of business outside the existing business of Pioneer and its subsidiaries as of the date of the Merger Agreement;

 

•

(i) adjust, split, combine, subdivide or reclassify any shares of its capital stock (other than such transactions by a wholly owned subsidiary of Pioneer), (ii) declare, authorize, establish a record date for, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination

 

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thereof) in respect of its capital stock (including any shares of Pioneer common stock), except for (w) dividends by any of its wholly-owned subsidiaries, (x) quarterly cash dividends by Pioneer with a customary record date prior to December 31, 2023 in compliance with the Pioneer Dividend Policy, provided that, for purposes of this clause (x), the base component of such dividend will not exceed $1.25 per share of Pioneer common stock and the variable component of such dividend will be 75% of the amount thereof calculated in compliance with the Pioneer Dividend Policy, (y) quarterly cash dividends by Pioneer with a customary record date after December 31, 2023 and prior to April 1, 2024 in compliance with the Pioneer Dividend Policy or, if the completion of the Merger is to occur in the first quarter of 2024 but prior to such customary record date, a quarterly cash dividend by Pioneer with a record date prior to the completion of the Merger in an amount up to the amount that would have been declared and paid in compliance with the Pioneer Dividend Policy on the customary record and payment dates thereof had such completion of the Merger not occurred, which, to the extent required, may be calculated based on estimates of free cash flow of Pioneer prepared by Pioneer in good faith and in accordance with the Pioneer Dividend Policy, provided that, for purposes of this clause (y), the base component of such dividend shall not exceed $1.25 per share of Pioneer common stock and the variable component of such dividend shall be 50% of the amount thereof calculated in compliance with the Pioneer Dividend Policy, and (z) quarterly cash dividends by Pioneer with a customary record date on or after April 1, 2024 in amount not to exceed $1.25 per share of Pioneer common stock or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any shares of its capital stock (including any shares of Pioneer common stock), Pioneer securities or Pioneer subsidiary securities, in each case as defined in the Merger Agreement, other than (A) the withholding of equity securities to satisfy tax obligations with respect to awards granted pursuant to any Pioneer equity plans existing as of the date of the Merger Agreement or (B) the acquisition by Pioneer of awards granted pursuant to any Pioneer equity plans prior to the date of the Merger Agreement or otherwise in accordance with the Merger in connection with the forfeiture of such awards;

 

•

(i) issue, deliver, sell, dispose, encumber, grant, confer, award or authorize the issuance, delivery, sale, disposal, encumbrance, grant, conferral or award of, any Pioneer securities or Pioneer subsidiary securities, other than the issuance (A) of any shares of Pioneer common stock upon settlement of Pioneer RSUs, Pioneer DSUs or Pioneer Performance Units that are outstanding on the date of the Merger Agreement in accordance with the terms of those equity-based awards on the date of the Merger Agreement, (B) of any Pioneer subsidiary securities to Pioneer or any other wholly owned subsidiary of Pioneer, (C) of shares of Pioneer common stock under the ESPP in accordance with the Merger Agreement and (D) in accordance with the terms of the 0.250% convertible senior notes of Pioneer issued pursuant to that certain Indenture, dated as of May 14, 2020, by and between Pioneer and Wells Fargo Bank, N.A., as trustee, that are outstanding on the date of the Merger Agreement or (ii) amend or otherwise change any term of any Pioneer security or any Pioneer subsidiary security (in each case, whether by merger, consolidation or otherwise);

 

•

incur any capital expenditures or any obligations or liabilities in respect thereof, except (i) as permitted by the Merger Agreement, (ii) for any capital expenditures not contemplated by clause (i) in an amount not to exceed $500,000,000 in the aggregate and (iii) for capital expenditures to repair damage resulting from insured casualty events or required on an emergency basis for the safety of individuals, assets or the environment (provided that Pioneer will notify ExxonMobil of any such emergency expenditure as soon as reasonably practicable), except that amounts paid as consideration for acquisitions permitted under the following bullet will not constitute capital expenditures for purposes of this bullet;

 

•

acquire (by merger, consolidation, acquisition or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) pursuant to an agreement of Pioneer or any of its subsidiaries in effect on the date of the Merger Agreement that was made available to ExxonMobil, (ii) acquisitions for which the consideration is less than $150,000,000 individually or $500,000,000 in the aggregate, (iii) acquisitions of licenses or hydrocarbons in the ordinary course of

 

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business, or (iv) the exchanges or swaps of oil and gas properties or other related assets in the ordinary course of business that are deemed to be less than $150,000,000 individually;

 

•

adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, other than such transactions among wholly owned subsidiaries of Pioneer;

 

•

sell, lease, license or otherwise transfer, or dispose of, mortgage, sell and lease back or otherwise, or create or incur any lien on, any of Pioneer’s or its subsidiaries’ assets, securities, properties, interests or businesses or other interests therein whether tangible or intangible (including securitizations) (other than intellectual property), other than (i) sales of inventory and equipment, or sales of hydrocarbons, in each case in the ordinary course of business, or sales of or disposals of obsolete or worthless assets at the end of their scheduled retirement, (ii) pursuant to contracts in effect on the date of the Merger Agreement that were made available to ExxonMobil, (iii) certain liens permitted by the terms of the Merger Agreement, (iv) transfers among Pioneer and its wholly owned subsidiaries, or among the wholly owned subsidiaries of Pioneer, (v) exchanges or swaps of oil and gas properties or other related assets in the ordinary course of business that are deemed to be less than $150,000,000 individually, and (vi) sales, leases, licenses, transfers or dispositions for which the consideration is less than $100,000,000 individually and $250,000,000 in the aggregate;

 

•

sell, assign, license, sublicense, transfer, convey, abandon, or incur any lien (other than certain liens permitted by the terms of the Merger Agreement) on or otherwise dispose of or fail to maintain, enforce or protect any material intellectual property owned, used or held for use by Pioneer or any of its subsidiaries (except for non-exclusive licenses or sublicenses of intellectual property granted by Pioneer or any of its subsidiaries in the ordinary course of business);

 

•

make any loans, advances or capital contributions to, or investments in, any other person, other than (i) in the ordinary course of business or (ii) for acquisitions permitted by the sixth bullet above;

 

•

create, incur, assume, refinance or otherwise become liable with respect to any indebtedness for borrowed money or guarantees thereof, other than (i) additional borrowings under that certain Credit Agreement, dated as of October 24, 2018, by and among Pioneer, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the other parties and lenders party thereto from time to time, as amended, supplemented, or otherwise modified from time to time, including by the First Amendment thereto, dated as of January 12, 2021, and the Second Amendment thereto, dated as of May 26, 2023, as in effect as of the date of the Merger Agreement, and (ii) indebtedness for borrowed money among Pioneer and its subsidiaries or among subsidiaries of Pioneer, or guarantees thereof;

 

•

except in compliance with the other provisions of the Merger Agreement or otherwise for entry into any material contract in the ordinary course of business (i) with a term not to exceed two years or (ii) that is terminable for convenience by Pioneer or the applicable subsidiary of Pioneer upon less than 90 days’ notice without any penalty or liability to Pioneer or its subsidiaries, enter into, amend or modify in any material respect or terminate or fail to renew any material contract or any contract that would constitute a material contract if it were in effect on the date of the Merger Agreement or otherwise waive, release or assign any material rights, claims or benefits of Pioneer or any of its subsidiaries;

 

•

except as required by the terms of any Pioneer employee plan as in effect on the date of the Merger Agreement or by applicable law, (i) with respect to any current or former Service Provider (as defined in Merger Agreement) of Pioneer, (A) grant or increase any compensation, bonus, severance, retention, change in control, termination pay, welfare or benefits, except for (x) increases in base compensation or wages (and corresponding increases in target annual bonuses) on terms consistent with those provided under the Merger Agreement and (y) (i) payment of annual bonuses to the extent earned pursuant to the applicable Pioneer benefit plan and (ii) grants of annual bonuses in respect of any fiscal year that commences after the date of the Merger Agreement and prior to the effective time of the

 

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Merger with target amounts that are consistent with the preceding clause (x) and other terms of the Merger Agreement and with performance goals that are consistent with the budget for the applicable fiscal year, in the case of each of clauses (x) and (y), in the ordinary course of business consistent with past practice, (B) grant any equity awards or discretionarily accelerate the vesting or payment of any equity awards held by any current or former Pioneer service provider, (C) take any action to accelerate the vesting or payment of, or otherwise fund or secure the payment of, any compensation or benefits under any Pioneer employee plan, or (D) (i) enter into or amend any employment, severance, retention, change in control, deferred compensation or similar agreement or arrangement other than contracts entered into or amended in the ordinary course of business consistent with past practice that are immaterial to Pioneer in both cost and significance, (ii) establish, terminate, adopt, enter into or amend any Pioneer employee plan, (iii) establish, adopt or enter into any collective bargaining agreement or recognize new unions or similar employee representative, (iv) hire any employees with base compensation of $300,000 or more (unless to replace a non-officer employee whose employment has ended), (v) terminate the employment of any Pioneer employee with base compensation of $300,000 or more other than for cause or (vi) take any action that would result in any Pioneer service provider being able to claim “good reason” (or term of similar meaning) prior to or as a result of the completion of the Merger pursuant to the provisions of the Pioneer employee plans;

 

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change in any respect Pioneer’s methods of accounting, except as required by changes in GAAP or in Regulation S-X of the Exchange Act, as agreed to by its independent public accountants;

 

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settle, release, waive, discharge or compromise, or offer or propose to settle, release, waive, discharge or compromise, (i) any action or threatened action (excluding, for these purposes, any action or threatened action relating to taxes) of Pioneer or any of its subsidiaries in excess of $10,000,000 individually or $25,000,000 in the aggregate, or that imposes any material restrictions or limitations upon the assets, operations or business of Pioneer or any of its subsidiaries or equitable or injunctive remedies or the admission of any criminal wrongdoing or (ii) any action or threatened action (excluding any action or threatened action relating to taxes) that relates to the transactions contemplated by the Merger Agreement;

 

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(i) make, change or revoke any material election with respect to taxes, other than in the ordinary course of business, (ii) file any amended material tax return, (iii) settle or compromise any material tax claim, audit or assessment, (iv) prepare and file any material tax return in a manner materially inconsistent with past practice, (v) adopt or change any material tax accounting method, (vi) change any tax accounting period, (vii) enter into any closing agreement with respect to any material tax or surrender any right to claim a material tax refund, offset or reduction in tax, or (viii) consent to any extension or waiver of the limitations period applicable to any material tax claim or assessment (other than any such extensions or waivers automatically granted);

 

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fail to use reasonable best efforts to maintain in full force and effect existing material insurance policies (or substantially similar replacements thereto); provided that in the event of a termination, cancellation or lapse of any material insurance policy, Pioneer shall use commercially reasonable efforts to promptly obtain replacement policies providing substantially comparable insurance coverage with respect to the material assets, operations and activities of Pioneer and its subsidiaries as currently in effect as of the date of the Merger Agreement;

 

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make or assume any derivatives, including any derivatives intended to benefit from or reduce or eliminate the risk of fluctuations in the price of hydrocarbons or other commodities, other than in the ordinary course of Pioneer’s marketing business in accordance with Pioneer’s current policies; or

 

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agree, resolve, or commit to do any of the foregoing.

Except (i) as required by applicable law, (ii) as otherwise required or expressly permitted by the Merger Agreement or (iii) as consented to by Pioneer in writing (such consent not to be unreasonably withheld, conditioned or delayed), and subject to certain exceptions and qualifications, from the date of the Merger

 

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Agreement until the effective time of the Merger, ExxonMobil and each of its subsidiaries are not permitted to, among other things:

 

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adopt or propose any change in the certificate of incorporation of ExxonMobil in any manner that would be materially adverse to Pioneer or Pioneer’s stockholders;

 

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adopt a plan or agreement of complete or partial liquidation or dissolution of ExxonMobil;

 

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declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to ExxonMobil’s capital stock (excluding, for the avoidance of doubt, stock buybacks) other than regular quarterly cash dividends payable by ExxonMobil including increases that are materially consistent with past practice; or

 

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agree or commit to do any of the foregoing.

OBLIGATIONS TO CALL STOCKHOLDERS’ MEETING

Pioneer will establish a record date (and commence a broker search pursuant to Section 14a-13 of the Exchange Act in connection therewith) for, and as soon as reasonably practicable following the date this registration statement is declared effective by the SEC, duly call, give notice of, convene and hold (no later than the 50^th day following the first mailing of the proxy statement/prospectus), a meeting of its stockholders entitled to vote on the Merger, at which Pioneer will seek the vote of Pioneer stockholders required to adopt the Merger Agreement. Subject to the rights of the Pioneer board to make an Adverse Recommendation Change, as discussed under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus, Pioneer has agreed to effect the unanimous recommendation of the Pioneer board in (i) determining that the Merger Agreement and transactions contemplated thereby, including the Merger, are fair to and in the best interest of Pioneer and its stockholders and (ii) approving, adopting and declaring advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, and resolving to recommend adoption of the Merger Agreement by its stockholders.

Once the stockholder meeting has been scheduled by Pioneer, Pioneer will not adjourn, postpone, reschedule or recess the stockholder meeting without the prior written consent of ExxonMobil (such consent not to be unreasonably withheld, conditioned or delayed). However, Pioneer may, notwithstanding the foregoing, without the prior written consent of ExxonMobil, postpone or adjourn the stockholder meeting (i) if, after consultation with ExxonMobil, Pioneer believes in good faith that such adjournment or postponement is reasonably necessary to solicit additional proxies for the purpose of obtaining the requisite vote of Pioneer stockholders to adopt the Merger Agreement, (ii) if there are not holders of a sufficient number of Pioneer shares present or represented by proxy at the stockholder meeting to constitute a quorum and (iii) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosure that Pioneer has determined in good faith, after consultation with outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the stockholders of Pioneer prior to the stockholder meeting; provided, however, that the stockholder meeting shall not be postponed or adjourned as a result of clause (i) or clause (ii) above for a period of more than ten business days in the aggregate without the prior written consent of ExxonMobil.

Unless the Merger Agreement is terminated, Pioneer’s obligation to call the stockholder meeting shall not be affected by the commencement, public proposal, public disclosure or communication to Pioneer or any other person of any other Acquisition Proposal (as defined under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus) from a third party. Further, unless the Merger Agreement is terminated, Pioneer’s obligation to hold the stockholder meeting will not be affected by the making of any Adverse Recommendation Change by the Pioneer board; provided, however, that in such event Pioneer will have no obligation to solicit proxies to obtain the requisite shareholder vote to adopt the Merger Agreement. Pioneer will provide updates to ExxonMobil with respect to the proxy solicitation for the shareholder meeting (including interim results) as reasonably requested by ExxonMobil.

 

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OBLIGATIONS TO RECOMMEND THE ADOPTION OF THE MERGER AGREEMENT

As discussed under “Proposal I: Adoption of the Merger Agreement” and “The Merger—Recommendation of the Pioneer Board of Directors and Reasons for the Merger” beginning on pages 118 and 59, respectively, of this proxy statement/prospectus, the Pioneer board unanimously recommends that Pioneer stockholders vote “FOR” the adoption of the Merger Agreement.

The Pioneer board, however, may (i) qualify, withdraw or modify in a manner adverse to ExxonMobil or Merger Sub, or propose publicly to qualify, withdraw or modify in a manner adverse to ExxonMobil or Merger Sub its recommendation that Pioneer stockholders adopt the Merger Agreement, (ii) recommend, adopt or approve an Adverse Recommendation Change (as defined under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus) for Pioneer or (iii) terminate the Merger Agreement in order to cause Pioneer to enter into an alternative acquisition agreement with respect to the Adverse Recommendation Change, in each case, under specified circumstances as discussed under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus.

NO SOLICITATION

Subject to the exceptions described below, from the date of the Merger Agreement until the effective time of the Merger, Pioneer has agreed not to, and to cause its subsidiaries and its and their directors and officers not to, and to use reasonable best efforts to cause its and its subsidiaries’ representatives not to, directly or indirectly, among other things: (i) solicit, initiate or knowingly facilitate or knowingly encourage the submission by a third party of any Acquisition Proposal (as defined below), (ii) enter into, engage in or participate in any discussions or negotiations with, furnish any information relating to Pioneer or any of its subsidiaries or afford access to the business, properties, assets, books, records, work papers and other documents related to Pioneer or any of its subsidiaries to, otherwise knowingly cooperate in any way with, or knowingly assist, facilitate or encourage any effort by any third party, in each case, in connection with or in response to an Acquisition Proposal, or any inquiry that would reasonably be expected to lead to an Acquisition Proposal, or (iii) enter into any oral or written or binding or non-binding agreement in principle, letter of intent, indication of interest, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument contemplating an Acquisition Proposal; provided that notwithstanding anything to the contrary in the Merger Agreement, Pioneer or any of its representatives may, (A) in response to an unsolicited inquiry or proposal, seek to clarify the terms and conditions of such inquiry or proposal and (B) in response to an inquiry or proposal from a third party, inform a third party or its representative of the restrictions imposed by the Merger Agreement. Pioneer has agreed not to release or permit the release of any person from, or to waive or permit the waiver of, any standstill or similar agreement with respect to any class of equity securities of Pioneer or any of its subsidiaries, and will enforce or cause to be enforced each such agreement in accordance with its terms at the request of ExxonMobil; provided, however, that Pioneer may waive or fail to enforce any provision of such standstill or similar agreement of any person if the Pioneer board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties to Pioneer’s stockholders under applicable law. The Merger Agreement provides that any breach of the foregoing obligations by Pioneer’s subsidiaries or Pioneer’s or its subsidiaries’ non-employee representatives acting at the direction of, or on behalf of, a director or senior executive officer of Pioneer shall be deemed to be a breach of such obligations by Pioneer.

The Pioneer board, including any committee thereof, has agreed it will not (i) qualify, withdraw or modify in a manner adverse to ExxonMobil or Merger Sub, or propose publicly to qualify, withdraw or modify in a manner adverse to ExxonMobil or Merger Sub, the Pioneer Board Recommendation (as defined in the Merger Agreement), (ii) adopt, endorse, approve or recommend, or propose publicly to adopt, endorse, approve or recommend, any Acquisition Proposal, or resolve to take any such action, (iii) publicly make any recommendation in connection with a tender offer or exchange offer by a third party other than a recommendation against such offer or a temporary “stop, look and listen” communication by the Pioneer board

 

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of the type contemplated by Rule 14d-9(f) under the Exchange Act or complying with disclosure obligations under Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act with regard to an Acquisition Proposal, (iv) other than with respect to a tender or exchange offer described in clause (iii), following the date any Acquisition Proposal or any material modification thereto is first publicly announced, fail to issue a press release reaffirming the Pioneer Board Recommendation within ten business days after a request by ExxonMobil to do so or (v) fail to include the Pioneer Board Recommendation in the proxy statement/prospectus when disseminated to ExxonMobil’s stockholders (any of the foregoing in these clauses (i) through (v), an “Adverse Recommendation Change”).

However, notwithstanding the foregoing, at any time prior to the requisite shareholder vote to adopt the Merger Agreement:

 

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Pioneer, directly or indirectly through its representatives may (A) engage in the activities prohibited by clauses (i) through (iii) as described under the first paragraph above in “The Merger Agreement—No Solicitation” with any third party and its representatives that has made after the date of the Merger Agreement a bona fide, written Acquisition Proposal that did not result from a breach of the applicable section of the Merger Agreement that the Pioneer board determines in good faith, after consultation with its outside legal counsel and financial advisors, is, or is reasonably likely to lead to, a Superior Proposal (as defined below), and (B) furnish to such third party or its representatives non-public information relating to Pioneer or any of its subsidiaries and afford access to the business, properties, assets, books or records of Pioneer or any of its subsidiaries pursuant to a confidentiality agreement (a copy of which shall be provided for informational purposes only to ExxonMobil) with such third party with terms no less favorable to Pioneer than those contained in the Confidentiality Agreement dated as of September 28, 2023 between Pioneer and ExxonMobil (the “Confidentiality Agreement”) (including standstill obligations); provided that all such information (to the extent that such information has not been previously provided or made available to ExxonMobil or its representatives, other than immaterial information) is provided or made available to ExxonMobil, as the case may be, prior to or substantially concurrently with the time it is provided or made available to such third party or its representatives; and

 

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the Pioneer board may (A) following receipt of a bona fide, written Acquisition Proposal that did not result from a breach of the Merger Agreement that the Pioneer board determines in good faith, after consultation with its outside legal counsel and financial advisors, constitutes a Superior Proposal, make an Adverse Recommendation Change or terminate the Merger Agreement in order to enter into a definitive agreement for such Superior Proposal, or (B) in response to events, changes or developments in circumstances that are material to Pioneer and its subsidiaries, taken as a whole, that were not known to the Pioneer board or if known the consequences of which were not reasonably foreseeable, in each case as of or prior to the date of the Merger Agreement, and that become known to the Pioneer board prior to the receipt of the requisite shareholder vote to adopt the Merger Agreement (an “Intervening Event”), make an Adverse Recommendation Change; provided that in no event shall any of the following constitute or contribute to an Intervening Event: (1) any action taken by the parties pursuant to the affirmative covenants set forth in the applicable section of the Merger Agreement, or the consequences of any such action, (2) any event, circumstance, development, occurrence, fact, condition, effect or change relating to ExxonMobil or its subsidiaries, (3) the fact that Pioneer exceeds any internal or published projections, estimates or expectations of Pioneer’s revenue, earnings or other financial performance or results of operations for any period; provided that any underlying event, circumstance, development, occurrence, fact, condition, effect or change that is the cause thereof may be taken into account, (4) changes in the price of shares of Pioneer common stock or ExxonMobil common stock; provided that any underlying event, circumstance, development, occurrence, fact condition, effect or change that is the cause thereof may be taken into account, or (5) the receipt, existence or terms of any Acquisition Proposal or any inquiry, offer, request or proposal that would reasonably be expected to lead to an Acquisition Proposal.

 

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Each of the exceptions above will apply only if the Pioneer board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably likely be inconsistent with its fiduciary duties under Delaware law. In addition, nothing contained in the Merger Agreement will prevent the Pioneer board from complying with Rule 14e-2(a) or Rule 14d-9 under the Exchange Act with regard to an Acquisition Proposal so long as any action taken or statement made to so comply is consistent with the Merger Agreement.

Pioneer will notify ExxonMobil promptly (but in no event later than 24 hours after a director or senior executive officer of Pioneer becomes aware of such Acquisition Proposal or request) after receipt by Pioneer (or any of its representatives) of any Acquisition Proposal or any request for information relating to Pioneer or any of its subsidiaries with respect to any Acquisition Proposal or for access to the business, properties, assets, books, records, work papers or other documents relating to Pioneer or any of its subsidiaries by any third party that has indicated it may be considering making, or has made, an Acquisition Proposal. Such notice shall identify the third party making, and the terms and conditions of, any such Acquisition Proposal, indication or request. Pioneer shall keep ExxonMobil reasonably informed, on a reasonably current basis, of the status and details of any such Acquisition Proposal, indication or request and shall promptly (but in no event later than 24 hours after receipt) provide to ExxonMobil copies of all correspondence and written materials sent or provided to Pioneer or any of its subsidiaries that describe any terms or conditions of any Acquisition Proposal (as well as written summaries of any oral communications addressing such matters). Any material amendment to any Acquisition Proposal will be deemed to be a new Acquisition Proposal for purposes of Pioneer’s compliance with the applicable section of the Merger Agreement.

Further, the Pioneer board shall not take any of the actions referred to in the second exception above, unless (i) Pioneer promptly notifies ExxonMobil, in writing at least four business days before taking that action, of its intention to do so, specifying in reasonable detail the reasons therefor (which notice shall not constitute an Adverse Recommendation Change), attaching (A) in the case of a Superior Proposal, the most current version of the proposed agreement under which such Superior Proposal is proposed to be consummated and identifying the third party making the Acquisition Proposal, or (B) in the case of an Intervening Event, a reasonably detailed description of such Intervening Event, (ii) Pioneer has negotiated, and has caused its representatives to negotiate in good faith with ExxonMobil during such notice period any revisions to the terms of the Merger Agreement that ExxonMobil proposes and (iii) following the end of such notice period, the Pioneer board shall have determined, in consultation with outside legal counsel and its financial advisor, and giving due consideration to such revisions proposed by ExxonMobil, that (A) in the case of a Superior Proposal, such Superior Proposal would nevertheless continue to constitute a Superior Proposal (assuming such revisions proposed by ExxonMobil were to be given effect) and (B) in the case of an Adverse Recommendation Change to be made pursuant to an Intervening Event, such Intervening Event would nevertheless necessitate the need for such Adverse Recommendation Change, and, in either case, the Pioneer board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably likely be inconsistent with its fiduciary duties under Delaware law.

Pioneer will, and will cause its subsidiaries and its and their directors and officers to, and shall use reasonable best efforts to cause its and their representatives to, cease immediately and cause to be terminated any and all existing activities, discussions or negotiations, if any, with any third party and its representatives conducted prior to the date of the Merger Agreement with respect to any Acquisition Proposal. Pioneer will promptly request that each third party, if any, that has executed a confidentiality agreement within the 12-month period prior to the date of the Merger Agreement in connection with its consideration of any Acquisition Proposal return or destroy all confidential information heretofore furnished to such person by or on behalf of Pioneer or any of its subsidiaries (and all analyses and other materials prepared by or on behalf of such person that contains, reflects or analyzes that information), in accordance with the terms of such confidentiality agreements. Pioneer shall use its reasonable best efforts to secure all certifications of such return or destruction as promptly as practicable.

 

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“Superior Proposal” means any bona fide, written Acquisition Proposal not solicited in breach of the Merger Agreement (but substituting “50%” for all references to “20%” in the definition of such term) by any person or group (other than ExxonMobil or any of its subsidiaries), (i) on terms that the Pioneer board determines in good faith after consultation with outside counsel and its financial advisor, are more favorable to Pioneer’s stockholders than the Merger, taking into account the terms and conditions (including all financial, regulatory, financing, conditionality, legal and other terms and conditions) of such proposal and the Merger Agreement (taking into account any revisions to the terms of the Merger Agreement proposed by ExxonMobil in response to such Acquisition Proposal as contemplated by the Merger Agreement) and (ii) that the Pioneer board determines is reasonably likely to be completed on the terms proposed, taking into account all financial, regulatory, financing, timing, conditionality, legal and other aspects of such proposal.

“Acquisition Proposal” means, other than the transactions contemplated by the Merger Agreement, any offer or proposal, including any amendments, adjustments, changes, revisions and supplements thereto, from any third party relating to, in a single transaction or a series of related transactions, (i) any acquisition or purchase, directly or indirectly, of assets constituting 20% or more of the consolidated assets of Pioneer and its subsidiaries or securities constituting 20% or more of any class of equity or voting securities of Pioneer or any of its subsidiaries with respect to which such subsidiaries’ assets, individually or in the aggregate, constitute, directly or indirectly, 20% or more of the consolidated assets of Pioneer, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any third party beneficially owning 20% or more of any class of equity or voting securities of Pioneer or (iii) a merger, consolidation, amalgamation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving Pioneer or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of Pioneer and its subsidiaries.

REASONABLE BEST EFFORTS COVENANT

Pioneer and ExxonMobil have agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Merger Agreement prior to the extended end date (April 10, 2025), including using such reasonable best efforts in connection with (i) preparing and filing as promptly as practicable with any governmental authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement.

In furtherance and not in limitation of the foregoing, ExxonMobil and Pioneer have agreed to make or cause to be made an appropriate filing of a notification and report form pursuant to the HSR Act with respect to the transactions contemplated by the Merger Agreement as promptly as practicable and in any event within twenty business days after the date of the Merger Agreement. ExxonMobil and Pioneer have agreed to respond as promptly as practicable to any inquiries received from any governmental authority for additional information and documentary material that may be requested pursuant to the HSR Act and use their reasonable best efforts to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable (taking into account the time reasonably needed to respond to and resolve concerns or requirements of applicable regulators). ExxonMobil, Merger Sub and Pioneer have agreed to (i) notify the other parties of any substantive communication to that party from any governmental authority, and, subject to applicable law, permit the other parties to review and discuss in advance, and consider in good faith the views of the other party in connection with, any proposed written communication to any governmental authority, (ii) promptly furnish the other parties with copies of all correspondence, filings and written communications between it and its representatives, on the one hand, and such governmental authority, on the other hand, with respect to the Merger Agreement and the transactions contemplated thereby, (iii) not participate in any substantive meeting or discussion with any governmental authority in respect of any filings, investigation or

 

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inquiry concerning any competition or antitrust matters in connection with the Merger Agreement or the transactions contemplated thereby unless it consults with the other parties in advance and, to the extent permitted by such governmental authority, gives the other parties the opportunity to attend and participate thereat and (iv) furnish the other parties with copies of all correspondence, filings, and communications (and memoranda setting forth the substance thereof) between them and their affiliates and their respective representatives on the one hand, and any governmental authority or members or their respective staffs on the other hand, with respect to any competition or antitrust matters in connection with the Merger Agreement. ExxonMobil will be responsible for paying all filing fees under the HSR Act and any other antitrust laws with respect to the transactions contemplated by the Merger Agreement.

ExxonMobil and Pioneer have agreed to use their reasonable best efforts to resist, defend against, lift or rescind the entry of any injunction or restraining order or other order of any governmental authority, and will defend and contest any litigation that may be pursued by any governmental authority seeking an order or decision, prohibiting the parties from consummating the transactions contemplated by the Merger Agreement in accordance with the terms thereof; provided that nothing in the Merger Agreement will require ExxonMobil or any of its subsidiaries to (and neither Pioneer nor any of its subsidiaries will, or will offer or agree to, do any of the following without ExxonMobil’s prior written consent): (i) sell, divest or discontinue any portion of the assets, liabilities, activities, businesses or operations of ExxonMobil, Pioneer or their respective subsidiaries existing prior to the effective time of the Merger, or (ii) accept any other remedy with respect to ExxonMobil’s, Pioneer’s or any of their respective subsidiaries’ assets, liabilities, activities, businesses or operations, in either case of the preceding clauses (i) and (ii), that would reasonably be expected to, either individually or in the aggregate, have a material adverse effect on the business, financial condition or results of operations of ExxonMobil, Pioneer and their respective subsidiaries, taken as a whole; provided, however, that for this purpose, ExxonMobil, Pioneer and their respective subsidiaries, taken as a whole, will be deemed a consolidated group of entities of the size and scale of a hypothetical company that is 100% of the size of Pioneer and its subsidiaries, taken as a whole, as of the date of the Merger Agreement (any of the actions described in the preceding clauses (i) and (ii), a “Burdensome Condition”). Notwithstanding the foregoing, at the written request of ExxonMobil, Pioneer will, and will cause its subsidiaries to, agree to take any action that would constitute a Burdensome Condition so long as such action is conditioned upon the occurrence of the effective time of the Merger.

ExxonMobil will, in reasonable consultation with Pioneer and in consideration of Pioneer’s views in good faith, be entitled to direct the defense of the Merger Agreement and the transactions contemplated thereby before any governmental authority and to take the lead in the scheduling of, and strategic planning for, any meetings with, and the conducting of negotiations with, governmental authorities regarding (i) the expiration or termination of any applicable waiting period relating to the Merger under the HSR Act or (ii) obtaining any consent, approval, waiver, clearance, authorization or permission from a governmental authority; provided, however, that it shall afford Pioneer a reasonable opportunity to participate therein.

During the period starting on the date of the Merger Agreement and ending upon the earlier of (i) termination of the Merger Agreement in accordance with its terms and (ii) the effective time of the Merger, and except for a confidentiality agreement permitted by the non-solicitation provisions of the Merger Agreement, as described under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus, neither ExxonMobil, Merger Sub, nor Pioneer will, and ExxonMobil, Merger Sub and Pioneer will not permit any of their respective subsidiaries to, enter into any acquisition, joint venture, exclusive arrangement or other similar arrangement, or any agreement to effect, or any letter of intent or similar document contemplating, any acquisition (including by merger, consolidation or acquisition), joint venture, exclusive arrangement or similar arrangement, that would reasonably be expected to prevent, materially hinder or materially delay the ability of the parties to (x) obtain the expiration or termination of the waiting period under the HSR Act or any other applicable antitrust laws, or (y) obtain any authorizations, consents, orders, and approvals of any governmental authorities, in each case, necessary for the consummation of the transactions contemplated by the Merger Agreement.

 

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PROXY STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT COVENANT

ExxonMobil and Pioneer agreed to prepare and cause to be filed with the SEC the registration statement (in which this proxy statement/prospectus will be included) and this proxy statement/prospectus and shall use commercially reasonable efforts to cause such filing to be made no later than 45 days after the date of the Merger Agreement. Pioneer, ExxonMobil and Merger Sub agreed to cooperate with each other in the preparation of the registration statement and the proxy statement/prospectus and furnish all information concerning themselves and their affiliates that is required in connection with the preparation of the registration statement or proxy statement/prospectus. No filing of, or amendment or supplement to, the registration statement or proxy statement/prospectus or response to SEC comments will be made by ExxonMobil or Pioneer without providing the other party a reasonable opportunity to review and comment thereon and such party shall give reasonable consideration to any comments made by the other party and its representatives; provided, that with respect to documents filed by a party related to the transaction contemplated by the Merger Agreement which are incorporated by reference in the registration statement or this proxy statement/prospectus, the other party’s right to comment shall not apply with respect to information (if any) relating to the filing party’s business, financial condition or results of operations. Each of ExxonMobil and Pioneer shall use its commercially reasonable efforts to (i) cause the registration statement and the proxy statement/prospectus at the date that it (and any amendment or supplement thereto) is first published, sent, or given to the stockholders of Pioneer and at the time of the meeting of Pioneer stockholders adopting the Merger Agreement and approving the Merger, to (A) comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act, respectively, and the rules and regulations promulgated thereunder and (B) not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and (ii) have the registration statement declared effective under the Securities Act as promptly as practicable after its filing and keep the registration statement effective for so long as necessary to consummate the Merger.

Each party will notify the other party promptly of the receipt of any comments or other communications, whether written or oral, that such party or its representatives may receive from time to time from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the registration statement or this proxy statement/prospectus or for additional information and each party will supply the other with copies of all correspondence between it or any of its representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, with respect to this proxy statement/prospectus or the transactions contemplated by the Merger Agreement. ExxonMobil, in consultation with Pioneer, will take the lead in any meetings or conferences with the SEC. If at any time prior to the meeting of Pioneer stockholders adopting the Merger Agreement and approving the Merger (or any adjournment or postponement thereof) any information relating to ExxonMobil or Pioneer, or any of their respective affiliates, directors or officers, is discovered by ExxonMobil or Pioneer that should be set forth in an amendment or supplement to the registration statement or this proxy statement/prospectus, so that the registration statement or this proxy statement/prospectus, respectively, would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information will promptly notify the other party hereto and an appropriate amendment or supplement describing such information will be promptly filed with the SEC and, to the extent required by applicable law, disseminated to the stockholders of Pioneer.

Pioneer will use reasonable best efforts to cause the proxy statement/prospectus to be mailed to the stockholders of Pioneer as promptly as practicable after the registration statement is declared effective by the SEC.

INDEMNIFICATION AND INSURANCE

The Merger Agreement provides that, for a period of six years after completion of the Merger, the Surviving Corporation will indemnify and hold harmless the present and former directors, officers, employees, fiduciaries

 

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and agents of Pioneer and its subsidiaries, and any individuals serving in such capacity at or with respect to other persons at Pioneer’s or its subsidiaries’ request (each, an “Indemnified Person”) from and against any losses, damages, liabilities, costs, expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect thereof) in respect of the Indemnified Persons’ having served in such capacity at or prior to the completion of the Merger, in each case, to the fullest extent permitted by the DGCL or provided under the organizational documents of Pioneer and its subsidiaries in effect on the date of the Merger Agreement; provided that such indemnification will be subject to any limitation imposed from time to time under applicable law. If any Indemnified Person is made party to any claim, action, suit, proceeding or investigation arising out of or relating to matters that would be indemnifiable pursuant to the immediately preceding sentence, the Surviving Corporation shall advance fees, costs and expenses (including attorneys’ fees and disbursements) as incurred by such Indemnified Person in connection with and prior to the final disposition of such claim, action, suit, proceeding or investigation in each case to the extent Pioneer is required to do so and on the same terms as provided in the organizational documents of Pioneer and its subsidiaries in effect on the date of the Merger Agreement; provided that any Indemnified Person wishing to claim indemnification or advancement of expenses, upon learning of any such proceeding, will notify the Surviving Corporation (but the failure so to notify will not relieve a party from any obligations that it may have, except to the extent such failure materially prejudices such party’s position with respect to such claims).

ExxonMobil has agreed to cause the Surviving Corporation to continue to maintain in effect for six years after completion of the Merger provisions in the organizational documents of the Surviving Corporation and its subsidiaries (or in such documents of any successor to the business thereof) regarding elimination of liability of directors, indemnification of officers, directors, employees, fiduciaries and agents and advancement of fees, costs and expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on the date of the Merger Agreement.

Prior to the completion of the Merger, Pioneer will or, if Pioneer is unable to, ExxonMobil will cause the Surviving Corporation as of the effective time of the Merger to, obtain and fully pay the premium for the non-cancellable extension of the directors’ and officers’ liability coverage of Pioneer’s existing directors’ and officers’ insurance policies and Pioneer’s existing fiduciary liability insurance policies (collectively, “D&O Insurance”), which D&O Insurance shall (i) be for a claims reporting or discovery period of at least six years from and after the completion of the Merger with respect to any claim related to any period of time at or prior to the completion of the Merger, (ii) be from an insurance carrier with the same or better credit rating as Pioneer’s current insurance carrier with respect to D&O Insurance and (iii) have terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under Pioneer’s existing policies with respect to any actual or alleged error, misstatement, misleading statement, act, omission, neglect, breach of duty or any matter claimed against an Indemnified Person by reason of him or her having served in such capacity that existed or occurred at or prior to completion of the Merger; provided that Pioneer will give ExxonMobil a reasonable opportunity to participate in the selection of such tail policy and Pioneer shall give reasonable and good faith consideration to any comments made by ExxonMobil with respect thereto; provided, further, that the cost of any such tail policy shall not exceed 300% of the aggregate annual premium paid by Pioneer in respect of the D&O Insurance; and provided, further, that if the aggregate premiums of such tail policy exceed such amount, Pioneer will, or ExxonMobil will cause the Surviving Corporation to, as applicable, obtain a policy with the greatest coverage available, with respect to matters occurring prior to the completion of the Merger, for a cost not exceeding such amount.

EMPLOYEE MATTERS

The Merger Agreement provides that each employee of Pioneer and its subsidiaries immediately prior to the effective time of the Merger who continues to be employed by ExxonMobil or any of its affiliates (including Pioneer and its subsidiaries) during the period from the completion of the Merger through the first anniversary thereof or shorter period of employment (such employees collectively, the “Continuing Employees”) will be

 

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provided with (i) a base salary or base wages that are no less than those provided by Pioneer and its subsidiaries to such Continuing Employee prior to the effective time of the Merger and (ii) a base salary or base wages, target annual cash incentive compensation opportunities, target long-term incentive compensation opportunities and other employee benefits (excluding any change in control, transaction, stay, retention or similar bonuses or payments) that are substantially comparable in the aggregate to those provided by Pioneer and its subsidiaries to such Continuing Employee immediately prior to the effective time of the Merger.

Upon the completion of the Merger, ExxonMobil will, or will cause its affiliates to, use reasonable best efforts to recognize the service of each Continuing Employee with Pioneer and its subsidiaries (other than for benefit accrual purposes under any defined benefit pension plan, deferred compensation plan (including any savings or supplemental savings deferred compensation plan) or post-retirement medical and welfare plan) under any benefit plan, program or arrangement of ExxonMobil, the Surviving Corporation, or any of their respective affiliates providing benefits to such Continuing Employee after the completion of the Merger, to the same extent such service credit was granted to such Continuing Employee under any analogous benefit plan or arrangement of Pioneer or any of its subsidiaries, unless it would result in duplication of benefits for the same period of service.

Prior to the closing date of the Merger (and so long as not otherwise directed in writing by ExxonMobil at least ten business days prior to the closing date of the Merger), Pioneer will terminate or cause the termination of its 401(k) plan maintained for current and former employees of Pioneer and its subsidiaries. In connection with Pioneer’s termination of its 401(k) plan, ExxonMobil will permit Continuing Employees to make rollover contributions in an ExxonMobil tax-qualified defined contribution plan. Immediately following the closing date of the Merger, Continuing Employees will be eligible to commence participation in ExxonMobil’s tax-qualified defined contribution plan if Pioneer’s 401(k) plan is terminated as described above.

In the plan year in which the effective time of the Merger occurs, ExxonMobil will, or will cause the Surviving Corporation or another affiliate to, with respect to any welfare benefit plans of ExxonMobil or its affiliates in which any Continuing Employee is eligible to participate on or after the effective time of the Merger, (i) cause any preexisting conditions or limitations and eligibility waiting periods to be waived with respect to Continuing Employees and their eligible dependents to the same extent satisfied or waived under the corresponding Pioneer welfare benefit plan as of the effective time of the Merger, and (ii) give each Continuing Employee credit for the plan year in which the effective time of the Merger occurs towards applicable copayments, deductibles and annual out-of-pocket limits for expenses incurred prior to the effective time of the Merger under the corresponding Pioneer welfare benefit plan to the same extent as such Continuing Employee was entitled, prior to the effective time of the Merger, to recognition of such copayments, deductibles and annual out-of-pocket limits under the corresponding Pioneer welfare benefit plan.

TAX MATTERS

The Merger Agreement provides that each of ExxonMobil and Pioneer will use its best efforts (i) to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a)(1)(B) of the Code and (ii) not to, and not to permit or cause any of its respective subsidiaries or affiliates to, take or cause to be taken any action, or fail to take or cause to be taken any action, which action, failure or cessation, as applicable, could reasonably be expected to cause the Merger to fail to or cease to qualify as a “reorganization” within the meaning of Section 368(a)(1)(B) of the Code; provided, however, that taking, permitting or causing to be taken any action, or any failure to act, in each case, that is required or specifically contemplated by any other provision of the Merger Agreement will not constitute a breach of the Merger Agreement. Although each of Pioneer and ExxonMobil has received a tax opinion from Gibson Dunn and Davis Polk, respectively, to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a), the receipt of a tax opinion from counsel is not a condition to either party’s obligation to complete the Merger. The Merger Agreement also provides that if, immediately before the effective time of the Merger, Gibson Dunn has not delivered to Pioneer, or Davis Polk has not delivered to ExxonMobil, an opinion, dated as of the closing date of the Merger, to the

 

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effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a)(1)(B) of the Code, then (i) ExxonMobil will cause an election to be filed with the IRS to treat Merger Sub as a corporation for U.S. federal income tax purposes, effective not later than as of the beginning of the closing date of the Merger, and (ii) each of the parties will use its best efforts to cause the Merger to qualify as a reorganization within the meaning of Section 368(a)(1)(B) and/or 368(a)(2)(E) of the Code.

OTHER AGREEMENTS

The Merger Agreement contains certain other covenants and agreements, including covenants and agreements requiring, among other things, and subject to certain exceptions and qualifications described in the Merger Agreement:

 

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ExxonMobil and Pioneer to cooperate with the other and use reasonable best efforts in taking, or causing to be taken, all actions reasonably necessary, proper or advisable to delist Pioneer’s common stock from the NYSE and terminate its registration under the Exchange Act; provided that such delisting and termination will not be effective until the completion of the Merger;

 

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each of ExxonMobil and Pioneer to promptly notify, and keep the other informed, of (i) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by the Merger Agreement, (ii) any notice or other communication from any governmental authority in connection with the transactions contemplated by the Merger Agreement, (iii) any actions commenced or, to its knowledge threatened against, relating to or involving or otherwise affecting Pioneer or any of its subsidiaries or ExxonMobil and any of its subsidiaries, as the case may be, that, if pending on the date of the Merger Agreement, would have been required to have been disclosed or that relate to the consummation of the transactions contemplated by the Merger Agreement, (iv) knowledge of any inaccuracy of any representation or warranty made by that party contained in the Merger Agreement, or any other fact, event or circumstance, that would reasonably be expected to cause any condition to the Merger to not be satisfied and (v) knowledge of any failure of that party to comply with or satisfy any covenant, condition or agreement that would reasonably be expected to cause any condition to the Merger to not be satisfied;

 

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subject to certain exceptions, ExxonMobil and Pioneer to consult with each other before issuing any press release, making any public statement, scheduling a press conference or taking certain other actions, in each case with respect to the Merger Agreement or the transactions contemplated by the Merger Agreement;

 

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prior to the completion of the Merger, ExxonMobil and Pioneer to take all such steps as may be required to cause any dispositions of (or other transactions in) Pioneer common stock (including derivative securities with respect to such Pioneer common stock) resulting from the transactions contemplated by the Merger Agreement or acquisitions of ExxonMobil common stock (including derivative securities with respect to ExxonMobil common stock) resulting from the transactions contemplated by the Merger Agreement, in each case, by each officer or director who is subject to the reporting requirements under Section 16(a) of the Exchange Act with respect to Pioneer to be exempt under Rule 16b-3 under the Exchange Act; and

 

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if any “control share acquisition,” “fair price,” “moratorium” or other antitakeover or similar statute or regulation becomes applicable to the transactions contemplated by the Merger Agreement, each of Pioneer, ExxonMobil and Merger Sub and the respective members of their boards of directors or board of managers (as applicable) shall, to the extent permitted by applicable law, use reasonable best efforts to grant such approvals and to take such actions as are reasonably necessary so that the transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated therein and otherwise to take all such other actions as are reasonably necessary to eliminate or minimize the effects of any such statute or regulation on the transactions contemplated thereby.

 

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TERMINATION OF THE MERGER AGREEMENT

The Merger Agreement may be terminated at any time before the completion of the Merger in any of the following ways:

 

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by mutual written agreement of ExxonMobil and Pioneer;

 

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by either Pioneer or ExxonMobil, if:

 

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the Merger has not been completed on or before the initial end date (October 10, 2024) or, if as of the initial end date (A) ExxonMobil is and has been in compliance with its reasonable best efforts obligations under the Merger Agreement (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 97 of this proxy statement/prospectus) and (B) certain conditions set forth under the Merger Agreement (in each case, to the extent relating to any antitrust laws, including the expiration or termination of the waiting period under the HSR Act (including any extension thereof)) will not have been satisfied or waived, but all of the other conditions set forth under the Merger Agreement have been satisfied or waived (or are then capable of being satisfied if the completion of the Merger were to take place on such date in the case of those conditions to be satisfied at the completion of the Merger) and either ExxonMobil or Pioneer elects to extend the initial end date to an extended end date (April 10, 2025), the Merger has not been completed on or before the extended end date; however, the right to terminate the Merger Agreement at the initial end date or the extended end date, as applicable, will not be available to any party to the Merger Agreement whose breach of any provision of the Merger Agreement results in the failure of the Merger to be completed by such time;

 

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any governmental authority of competent jurisdiction issues an injunction, order or decree or enacts an applicable law that (A) prohibits or makes illegal consummation of the Merger or (B) permanently enjoins ExxonMobil or Merger Sub from consummating the Merger, and such injunction, order, decree or applicable law referenced has become final and nonappealable; or

 

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Pioneer stockholders fail to adopt the Merger Agreement upon a vote taken on a proposal to adopt the Merger Agreement at a Pioneer stockholders’ meeting called for that purpose; or

 

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by ExxonMobil if:

 

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before the requisite Pioneer stockholder vote on a proposal to adopt the Merger Agreement has been obtained, an Adverse Recommendation Change has occurred or there shall have been a material breach of the non-solicitation provisions of the Merger Agreement, as described under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus; or

 

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before the Merger has been completed, a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Pioneer set forth in the Merger Agreement has occurred that would cause the conditions to closing not to be satisfied and such breach or failure is incapable of being cured by the end date or, if curable by the end date, is not cured by Pioneer within 30 days after receipt by Pioneer of written notice of such breach or failure; provided that, at the time of the delivery of such notice or thereafter, ExxonMobil or Merger Sub is not in material breach of its or their obligations under the Merger Agreement so as to cause any of the closing conditions not to be capable of being satisfied; or

 

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by Pioneer:

 

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before the requisite Pioneer stockholder vote on a proposal to adopt the Merger Agreement has been obtained, in order to enter into an alternative acquisition agreement with respect to a Superior Proposal, as described under “The Merger Agreement—No Solicitation” beginning on page 94 of this proxy statement/prospectus, provided that, concurrently with such termination, Pioneer pays, or causes to be paid, to ExxonMobil, in immediately available funds, the Termination Fee, as defined below; or

 

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prior to the completion of the Merger, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of ExxonMobil set forth in the Merger Agreement shall have occurred that would cause the closing conditions not to be satisfied and such breach or failure is incapable of being cured by the end date or, if curable by the end date, is not cured by ExxonMobil or Merger Sub within 30 days after receipt by ExxonMobil of written notice of such breach or failure; provided that, at the time of the delivery of such notice or thereafter, Pioneer is not in material breach of its obligations under the Merger Agreement so as to cause any of the closing conditions not to be capable of being satisfied.

If the Merger Agreement is validly terminated, the Merger Agreement will become void and of no effect without liability of any party to the Merger Agreement (or any stockholder, director, officer, employee, agent, consultant or representative of any party to the Merger Agreement) to the other parties, except that certain specified provisions will survive termination. However, neither ExxonMobil nor Pioneer will be relieved or released from any liabilities or damages arising out of any (i) fraud by such party or (ii) intentional breach by such party of its covenants or agreements set forth in the Merger Agreement.

If the Merger Agreement is terminated by ExxonMobil due to an Adverse Recommendation Change or by Pioneer in order to enter into an alternative acquisition agreement with respect to a Superior Proposal, Pioneer agrees to pay to ExxonMobil $1,815,000,000 in immediately available funds (the “Termination Fee”), in the case of termination by ExxonMobil, within three business days after such termination and, in the case of termination by Pioneer, contemporaneously with and as a condition to such termination.

If (A) the Merger Agreement is terminated by ExxonMobil or Pioneer because the requisite Pioneer shareholder vote to adopt the Merger Agreement has not been obtained or because prior to completion of the Merger there has been a breach of a representation or warranty or failure to perform any covenant on the part of Pioneer that has caused the closing conditions not to be satisfied, (B) after the date of the Merger Agreement and prior to such termination, an Acquisition Proposal has been publicly announced or otherwise been communicated to the Pioneer stockholders and (C) within 12 months following the date of such termination, Pioneer or any of its subsidiaries shall have entered into a definitive agreement with respect to or recommended to its stockholders an Acquisition Proposal or an Acquisition Proposal shall have been consummated, then Pioneer will pay to ExxonMobil in immediately available funds, prior to or concurrently with the occurrence of the applicable event described in clause (C), the Termination Fee.

EXCLUSIVE REMEDY

Except in the case of fraud or willful breach by Pioneer of its covenants or agreements in the Merger Agreement, in circumstances where a termination fee is payable or is paid by Pioneer, as discussed under “The Merger Agreement—Termination of the Merger Agreement” beginning on page 103 of this proxy statement/prospectus, such payment will be ExxonMobil’s sole and exclusive remedy for damages against Pioneer and its subsidiaries, former, current or future partners, stockholders, managers, members, affiliates and representatives, and none of Pioneer and its subsidiaries, former, current or future partners, stockholders, managers, members, affiliates or representatives will have any further liability or obligation to ExxonMobil relating to or arising out of the Merger Agreement or the transactions contemplated by the Merger Agreement. Notwithstanding the foregoing, the payment of the Termination Fee by Pioneer will not relieve Pioneer from any liability or obligation under the Confidentiality Agreement.

To the extent that a Termination Fee is not promptly paid by Pioneer when due, Pioneer is also required to pay to ExxonMobil interest on such fee at the annual rate equal to the prime rate, as published in The Wall Street Journal in effect on the date such payment was required to be made, through the date such payment was actually received, or such lesser rate as is the maximum permitted by applicable law.

 

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OTHER EXPENSES

Except as described above, the Merger Agreement provides that each of ExxonMobil and Pioneer will pay its own costs and expenses in connection with the transactions contemplated by the Merger Agreement.

SPECIFIC PERFORMANCE; REMEDIES

The parties to the Merger Agreement are entitled to an injunction (even if monetary damages are available) to prevent breaches of the Merger Agreement or to enforce specifically the terms and provisions of the Merger Agreement. This entitlement is in addition to any other remedy to which the parties are entitled at law or in equity.

THIRD PARTY BENEFICIARIES

The Merger Agreement is not intended to and does not confer upon any person other than the parties to the Merger Agreement any rights or remedies, except:

 

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the right of Pioneer stockholders and equity award holders to receive the applicable Merger Consideration in respect of their shares of Pioneer common stock and Pioneer equity awards, as applicable; and

 

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the right of the Indemnified Persons to enforce the obligations described under “The Merger Agreement—Indemnification and Insurance” beginning on page  99 of this proxy statement/prospectus.

AMENDMENTS; WAIVERS

Any provision of the Merger Agreement may be amended or waived before completion of the Merger if the amendment or waiver is in writing and is signed, in the case of an amendment, by each party to the Merger Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. After adoption of the Merger Agreement by Pioneer stockholders, the parties may not amend or waive any provision of the Merger Agreement if such amendment or waiver would require further approval of Pioneer stockholders under applicable law unless such approval has first been obtained.

 

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U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following general discussion sets forth the material U.S. federal income tax consequences of the Merger to U.S. holders (as defined below) of Pioneer common stock that exchange their shares of Pioneer common stock for ExxonMobil common stock in the Merger. This discussion does not address any tax consequences arising under the laws of any U.S. state or local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to income tax. In addition, it does not address any alternative minimum tax consequences of the Merger or the potential application of the Medicare contribution tax on net investment income. This discussion is based upon the Code, the regulations promulgated under the Code and court and administrative rulings and decisions, all as in effect on the date of this proxy statement/prospectus. These laws may change, possibly retroactively, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion.

This discussion addresses only consequences to those U.S. holders that hold their shares of Pioneer common stock as a “capital asset” within the meaning of Section 1221 of the Code. Further, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to U.S. holders in light of their particular circumstances or that may be applicable to U.S. holders that are subject to special treatment under the U.S. federal income tax laws, such as:

 

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a financial institution;

 

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a tax-exempt organization;

 

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an S corporation or other pass-through entity (or an investor in an S corporation or other pass-through entity);

 

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an insurance company;

 

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a mutual fund;

 

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a dealer or broker in stocks and securities, or currencies;

 

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a trader in securities that elects mark-to-market treatment;

 

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a holder of Pioneer common stock or Pioneer equity awards that received Pioneer common stock or Pioneer equity awards through a tax-qualified retirement plan or otherwise as compensation;

 

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a person that is not a U.S. holder (as defined below);

 

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a person that has a functional currency other than the U.S. dollar;

 

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a holder of Pioneer common stock that holds Pioneer common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction;

 

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a person who actually or constructively owns more than 5% of Pioneer common stock;

 

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a person subject to special tax accounting rules (including rules requiring recognition of gross income based on a taxpayer’s applicable financial statement); or

 

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a United States expatriate.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Pioneer common stock that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) a trust if (x) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (y) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person, or (iv) an estate that is subject to U.S. federal income tax on its income regardless of its source.

 

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The U.S. federal income tax consequences to a partner in an entity or arrangement treated as a partnership, for U.S. federal income tax purposes, that holds Pioneer common stock generally will depend on the status of the partner and the activities of the partnership. Partners in such a partnership holding Pioneer common stock should consult their own tax advisors.

Determining the tax consequences of the Merger may be complex. U.S. holders should consult with their own tax advisors as to the tax consequences of the Merger in light of their particular circumstances, including the applicability and effect of the alternative minimum tax and any U.S. state or local, non-U.S. or other tax laws and of changes in those laws.

Tax Consequences of the Merger in General

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and ExxonMobil and Pioneer intend to report the Merger consistent with such qualification. Each of ExxonMobil and Pioneer has agreed in the Merger Agreement to use its best efforts (i) to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) not to, and not to permit or cause any of its respective subsidiaries or affiliates to, take or cause to be taken, or fail to take or cause to be taken, any action, which action, failure or cessation, could reasonably be expected to cause the Merger to fail to or cease to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Exxon has received from Davis Polk, and Pioneer has received from Gibson Dunn, an opinion to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. These opinions of counsel are based on customary assumptions and representations, covenants and undertakings of ExxonMobil, Pioneer and Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or otherwise is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Merger could differ materially from those described in this proxy statement/prospectus. The receipt of a tax opinion from counsel is not a condition to either party’s obligation to complete the Merger. ExxonMobil and Pioneer have not sought, and do not intend to seek, any ruling from the IRS regarding the qualification of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code. As a result, there can be no assurance that the IRS will agree with the opinions or would not assert, or that a court would not sustain, a position contrary to the treatment of the Merger as a “reorganization” within the meaning of Section 368(a) of the Code.

Tax Consequences if the Merger Qualifies as a “Reorganization” Within the Meaning of Section 368(a) of the Code

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the Merger is so treated, the material U.S. federal income tax consequences of the Merger to U.S. holders of Pioneer common stock will be as follows:

 

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A U.S. holder generally will not recognize gain or loss, except with respect to cash proceeds from the sale of fractional shares of ExxonMobil common stock (as discussed below).

 

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The aggregate tax basis in the shares of ExxonMobil common stock that a U.S. holder receives in the Merger (including any fractional share interests deemed received and sold, as described below) will equal the U.S. holder’s aggregate adjusted tax basis in the Pioneer common stock exchanged in the Merger.

 

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A U.S. holder’s holding period for the shares of ExxonMobil common stock received in the Merger (including a fractional share interest deemed received and sold, as described below) will include the holding period for the shares of the Pioneer common stock exchanged in the Merger.

If a U.S. holder of Pioneer common stock acquired different blocks of Pioneer common stock at different times or at different prices, such U.S. holder’s basis and holding period in its shares of ExxonMobil common stock may be determined separately with reference to each block of Pioneer common stock. Any such U.S. holder should consult its tax advisor regarding the holding periods of the particular shares of ExxonMobil common stock received in the Merger.

 

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A U.S. holder who receives cash proceeds from the sale of a fractional share of ExxonMobil common stock generally will be treated as having received the fractional share of ExxonMobil common stock pursuant to the Merger and then as having sold such fractional share of ExxonMobil common stock for cash. As a result, a U.S. holder generally will recognize gain or loss equal to the difference, if any, between (i) the amount of cash received and (ii) the portion of the U.S. holder’s aggregate adjusted tax basis of its Pioneer common stock exchanged in the Merger that is allocable to the fractional share of ExxonMobil common stock that is sold. This gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if, as of the closing date of the Merger, the U.S. holder’s holding period for the fractional shares of ExxonMobil common stock deemed to be received is greater than one year. Long-term capital gains of individuals are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations.

A U.S. holder may be required to retain records related to such holder’s Pioneer common stock and file with its U.S. federal income tax return for the taxable year that includes the Merger a statement setting forth certain facts relating to the Merger.

Tax Consequences if the Merger Does Not Qualify as a “Reorganization” Within the Meaning of Section 368(a) of the Code

If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, then the receipt of ExxonMobil common stock (and cash proceeds from the sale of fractional shares of ExxonMobil common stock) in exchange for Pioneer common stock in the Merger will be a taxable transaction. In such a case, a U.S. holder generally will recognize gain or loss in an amount equal to the difference, if any, between (i) the sum of the fair market value of the ExxonMobil common stock received in the Merger plus the amount of any cash proceeds from the sale of fractional shares of ExxonMobil common stock and (ii) such holder’s adjusted tax basis in its shares of Pioneer common stock exchanged in the Merger. Gain or loss must be calculated separately for each block of shares of Pioneer common stock exchanged by such U.S. holder if such blocks were acquired at different times or for different prices. Any gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if, as of the closing date of the Merger, the holding period in a particular block of shares of Pioneer common stock exchanged in the Merger is greater than one year as of the date of the Merger. Long-term capital gains of individuals are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations.

Backup Withholding

U.S. holders of Pioneer common stock generally will be subject to information reporting and backup withholding (currently at a rate of 24%) on any cash proceeds from the sale of fractional shares of ExxonMobil common stock. A U.S. holder generally will not be subject to backup withholding, however, if the U.S. holder:

 

•

furnishes a correct taxpayer identification number, certifies it is not subject to backup withholding on IRS Form W-9 or successor form (or appropriate substitute) included in the letter of transmittal sent to the U.S. holders after the closing of the Merger, and otherwise complies with all of the applicable requirements of the backup withholding rules; or

 

•

provides proof that the U.S. holder is otherwise exempt from backup withholding.

Any amounts withheld under the backup withholding rules are not an additional tax and generally will be allowed as a refund or credit against a U.S. holder’s U.S. federal income tax liability, if any, provided that such U.S. holder timely furnishes the required information to the IRS.

This discussion of material U.S. federal income tax consequences is not tax advice. Holders of Pioneer common stock are urged to consult their tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules or under the laws of any U.S. state or local, non-U.S. or other taxing jurisdiction or under any applicable tax treaty.

 

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INTERESTS OF PIONEER’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER

In considering the recommendation of the Pioneer board that Pioneer stockholders vote “FOR” the Merger Agreement Proposal and the Advisory Compensation Proposal, Pioneer stockholders should be aware that the directors and executive officers of Pioneer have interests in the Merger that may be different from, or in addition to, those of Pioneer stockholders generally.

These interests are described below, and certain of them are quantified below. The Pioneer board was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, in approving the Merger Agreement, and in recommending the approval of the Merger Agreement Proposal and Advisory Compensation Proposal.

Positions with ExxonMobil Following the Merger

Pursuant to the Merger Agreement, Pioneer and ExxonMobil have agreed that Scott D. Sheffield and one other current director of Pioneer who is selected by Pioneer and reasonably acceptable to ExxonMobil will be appointed to the ExxonMobil board immediately following the effective time of the Merger. In addition, as of the effective time of the Merger, ExxonMobil will appoint Richard P. Dealy as Pioneer’s lead representative on the integration and transition team established and maintained by ExxonMobil.

Indemnification and Insurance

ExxonMobil has agreed that the Surviving Corporation will, for a period of six years after the completion of the Merger, indemnify and hold harmless the indemnified persons from and against any losses, damages, liabilities, costs, expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect thereof) in respect of the indemnified persons’ having served in such capacity at or prior to the completion of the Merger, in each case, to the fullest extent permitted by the DGCL or provided under the organizational documents of Pioneer and its subsidiaries in effect on the date of the Merger Agreement; provided that such indemnification will be subject to any limitation imposed from time to time under applicable law. For more information, see “The Merger Agreement — Indemnification and Insurance” beginning on page  99 of this proxy statement/prospectus.

Annual Compensation of Pioneer Directors

Pioneer non-employee directors will receive the unpaid portion of their full annual cash retainers under the Company’s non-employee director compensation program for the service year in which the closing of the Merger occurs, regardless of the time during such service year that such closing actually occurs.

2023 Annual Cash Bonuses of Executive Officers

On December 15, 2023, the Compensation and Leadership Development Committee of the Pioneer board approved the payout of annual bonuses for the year ended December 31, 2023, which will be paid in December 2023. The table below sets forth the 2023 annual bonuses for the Pioneer named executive officers. The aggregate payout of the 2023 annual bonuses approved for the other Pioneer executive officers was approximately $5,700,000, which will also be paid in December 2023.

 

Executive Officer Name		Amount of 2023 Cash Bonus Award
Scott D. Sheffield		$	3,600,000
Richard P. Dealy		$	1,536,000
Mark Berg		$	1,190,000
J.D. Hall		$	1,190,000
Neal H. Shah		$	1,906,875

 

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Treatment of Pioneer Equity Awards in the Merger

On December 15, 2023, the Compensation and Leadership Development Committee of the Pioneer board approved the accelerated vesting and payout of the Pioneer Performance Units granted in 2021 at maximum performance level for all executive officers (including the payout of associated accrued dividend equivalents) and the accelerated vesting of the following Pioneer RSUs and shares of Pioneer Restricted Stock for certain executive officers, in each case, which would have otherwise vested prior to or in connection with the Merger.

 

Executive Officer Name		Number of Pioneer Performance Units That Vested				Accrued Dividend Equivalents Paid on Performance Units				Number of Pioneer RSUs That Vested				Number of Shares of Pioneer Restricted Stock That Vested
Scott D. Sheffield			181,708			$	8,400,361				—				—
Richard P. Dealy			41,788			$	1,931,859				7,079				3,715
Mark Berg			27,960			$	1,292,591				—				—
J.D. Hall			27,960			$	1,292,591				3,835				2,486
Mark H. Kleinman			22,123			$	1,022,746				—				—
Elizabeth A. McDonald			9,588			$	443,253				4,756				—
Neal H. Shah			20,893			$	965,883				9,650				—
Tyson L. Taylor			9,220			$	426,241				4,330				—
Bonnie S. Black			8,235			$	380,704				3,589				—
Christopher L. Washburn			—				—				2,267				—

The shares received by the Pioneer executive officers upon vesting of the Pioneer RSUs and Pioneer Restricted Stock are subject to a mandatory holding period through the earlier of the original vesting date or the effective time of the Merger, and in the event of a termination of employment with Pioneer that would have resulted in a forfeiture of such award under the terms of the applicable award agreement prior to the effective time of the Merger, the Pioneer executive officer will repay, and Pioneer may clawback, the shares received upon vesting of such Pioneer RSUs and Pioneer Restricted Stock (and a cash amount equal to the tax withholdings at settlement).

The Merger Agreement provides for the treatment set forth below with respect to outstanding awards held by Pioneer’s directors and executive officers at the effective time of the Merger.

 

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Treatment of Pioneer RSUs for Pioneer Executive Officers. At or immediately prior to the effective time of the Merger, each Pioneer RSU (other than those granted on or after October 10, 2023 that remain unvested as of immediately prior to the effective time of the Merger) outstanding as of immediately prior to the effective time of the Merger, including those held by a Pioneer executive officer, will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer RSU, subject to applicable tax withholding. Each Pioneer RSU granted on or after October 10, 2023 that is outstanding and remains unvested as of immediately prior to the effective time of the Merger, including those held by a Pioneer executive officer, will be converted into a number of ExxonMobil restricted stock units equal to the Merger Consideration, multiplied by the total number of shares of Pioneer common stock subject to such Pioneer RSU. Such ExxonMobil restricted stock units will continue vesting on their existing vesting schedule, with pro-rata monthly acceleration provisions in the event of such Pioneer executive officer’s termination of employment without cause, resignation for good reason (as defined in Pioneer’s severance plan), death, disability or normal retirement. The following table sets forth, for each of Pioneer’s executive officers, the aggregate number of Pioneer shares subject to unvested Pioneer RSUs held by such executive officer as of November 17, 2023 (of which, certain Pioneer RSUs were accelerated and settled on December 15, 2023, as described above).

 

Executive Officer Name		Number of Pioneer RSUs
Scott D. Sheffield			20,885
Richard P. Dealy			16,686
Mark S. Berg			10,176
J.D. Hall			7,928
Mark H. Kleinman			9,576
Elizabeth A. McDonald			4,756
Neal H. Shah			9,650
Tyson L. Taylor			4,330
Bonnie S. Black			3,589
Christopher L. Washburn			2,267

In addition to the Pioneer RSUs set forth above, Mr. Sheffield also holds 2,853 Pioneer DSUs related to his prior service as a Pioneer non-employee director, which will be treated in a manner consistent with the Pioneer DSUs held by Pioneer non-employee directors as described below.

Treatment of Pioneer Restricted Stock for Pioneer Executive Officers. Immediately prior to the effective time of the Merger, each share of Pioneer Restricted Stock outstanding as of immediately prior to the effective time of the Merger, including those held by a Pioneer executive officer, will become fully vested, Pioneer will withhold a number of such shares necessary to satisfy any tax withholding, and the remainder of such shares will be converted into the right to receive the Merger Consideration. The following table sets forth, for each of Pioneer’s executive officers, the aggregate number of unvested shares of Pioneer Restricted Stock held by such executive officer as of November 17, 2023 (all of which were accelerated and settled on December 15, 2023, as described above).

 

Executive Officer Name		Number of Shares of Pioneer Restricted Stock
Richard P. Dealy			3,715
J.D. Hall			2,486

Treatment of Pioneer Performance Units for Pioneer Executive Officers. At or immediately prior to the effective time of the Merger, each Pioneer Performance Unit outstanding as of immediately prior to the effective time of the Merger, including those held by a Pioneer executive officer, will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer Performance Unit (with the number of shares of Pioneer common stock subject to each

 

111

Pioneer Performance Unit determined based on the maximum level of performance), and all dividend equivalents accrued in respect of such shares of Pioneer common stock will be paid in cash by Pioneer at the effective time of the Merger, subject to applicable tax withholding. The following table sets forth, for each of Pioneer’s executive officers, the aggregate number of Pioneer shares subject to unvested Pioneer Performance Units held by such executive officers and the associated accrued dividend equivalents on such Pioneer Performance Units, in each case, as of November 17, 2023, assuming maximum performance levels (of which certain Pioneer Performance Units and associated accrued dividend equivalents were accelerated and settled on December 15, 2023, as described above).

 

Executive Officer Name		Number of Pioneer Performance Units (at Maximum)				Accrued Dividend Equivalents on Performance Units (at Maximum)
Scott D. Sheffield			375,201			$	12,753,671
Richard P. Dealy			110,898			$	3,554,782
Mark S. Berg			65,478			$	2,155,553
J.D. Hall			65,478			$	2,155,553
Mark H. Kleinman			50,853			$	1,627,678
Elizabeth A. McDonald			23,631			$	747,046
Neal H. Shah			56,751			$	1,791,368
Tyson L. Taylor			21,895			$	681,689
Bonnie S. Black			18,526			$	594,395
Christopher L. Washburn			1,153			$	12,406

Treatment of Pioneer RSUs and Pioneer DSUs for Pioneer Directors. Each Pioneer RSU held by a Pioneer non-employee director will be treated in a manner consistent with the treatment of Pioneer RSUs held by Pioneer executive officers in connection with the Merger. In addition, at or immediately prior to the effective time of the Merger, each Pioneer DSU outstanding as of immediately prior to the effective time of the Merger, including those held by a non-employee director, will be canceled and converted into the right to receive the Merger Consideration in respect of the total number of shares of Pioneer common stock subject to such Pioneer DSU, subject to applicable tax withholding. The following table sets forth, for each of Pioneer’s non-employee directors, the aggregate number of Pioneer shares subject to unvested Pioneer RSUs and Pioneer DSUs held by such non-employee directors as of November 17, 2023.

 

Director Name		Number of Unvested Pioneer RSUs				Number of Pioneer DSUs
A.R. Alameddine			1,219				3,299
Lori A. George			1,099				3,190
Edison C. Buchanan			785				22,857
Maria S. Dreyfus			1,119				—
Matthew M. Gallagher			1,219				4,451
Phillip A. Gobe			855				2,748
Stacy P. Methvin			855				2,750
Royce W. Mitchell			855				2,233
J. Kenneth Thompson			1,134				—
Phoebe A. Wood			855				10,510

The estimated aggregate value of equity awards held by Pioneer’s executive officers (including Pioneer’s named executive officers) and Pioneer’s non-employee directors that will accelerate in connection with the Merger, taking into account all dividend equivalents accrued in respect of the shares of Pioneer common stock underlying Pioneer Performance Units, which will be paid in cash by Pioneer at the effective time of the Merger, assuming that (a) the Merger closed on November 17, 2023 and (b) the value per share of Pioneer common stock on consummation of the Merger is $248.90 (for further information regarding these assumptions, please see below

 

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under “—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers”) is approximately $246,576,643 for Pioneer’s executive officers and approximately $2,487,756 for Pioneer’s non-employee directors. These values do not take into account awards that subsequently vested and settled on December 15, 2023 or include any new Pioneer equity awards that may be granted after the date of this proxy statement. For the estimated values associated with the accelerated vesting of Pioneer RSUs, Pioneer Restricted Stock and Pioneer Performance Units held by the Pioneer named executive officers, see the “Equity” column of the table under “—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers” below.

Change in Control Agreements

Each of the Pioneer executive officers is party to a change in control agreement (a “CIC Agreement”) that provides certain payments and benefits upon various terminations of employment on or within two years following a change in control of Pioneer or following a potential change in control of Pioneer (so long as the change in control of Pioneer occurs within 12 months after such termination) (as applicable, the “change in control protection period”). Pioneer’s entry into the Merger Agreement constituted a potential change in control for purposes of the CIC Agreements, and the Merger will constitute a change in control for purposes of the CIC Agreements. In addition, if ExxonMobil does not provide a Pioneer executive officer notice of such executive officer’s future position and city of job location on or prior to the 18-month anniversary following the closing of the Merger, then the change in control protection period will be extended to the six-month anniversary of the date that ExxonMobil provides such notice to such executive officer.

Death/Disability. In the event a Pioneer executive officer’s employment is terminated due to death or disability, the CIC Agreements provide for a lump sum separation payment equal to the Pioneer executive officer’s annual base salary and payment of any earned but unpaid bonus or cash incentive compensation for completed performance periods.

Normal Retirement. In the event a Pioneer executive officer voluntarily resigns after attaining a minimum retirement age of 55, having a minimum of five years of service and having an age plus years of service of at least 65, the CIC Agreements provide for a lump sum payment equal to the Pioneer executive officer’s annual base salary.

Qualifying Termination. In the event the Pioneer executive officer is terminated without cause by Pioneer or resigns in a termination for good reason (each as defined below and each, a “qualifying termination”), the CIC Agreements provide for the following benefits:

 

•

A lump sum separation payment equal to (a) 2.99 times (or, for Mr. Washburn, 2.00 times) the sum of (i) the Pioneer executive officer’s base salary and (ii) the greater of his or her target bonus (as defined in the CIC Agreements) or the average of the last three annual bonuses paid to the Pioneer executive officer; plus (b) a pro-rated target bonus; plus (c) if such termination occurs prior to the change in control, a true-up amount for any unvested equity awards granted prior to October 10, 2023 forfeited on such earlier termination based on the value of the Pioneer common stock on the change in control date; plus (d) if 30 days’ notice is not provided for termination by Pioneer, 1/12th of the Pioneer executive officer’s annual base salary;

 

•

Continued coverage for the Pioneer executive officer and any eligible dependents under Pioneer’s group medical plans at no cost for 36 months (or, for Mr. Washburn, 24 months) and thereafter at active employee premium rates through the earlier of Medicare eligibility of the executive officer (or, for any spouse that is covered, the date that the spouse is Medicare eligible) or death of the executive officer (or for any spouse that is covered, the date of the spouse’s death), with such coverage being secondary to any other coverage made available to the Pioneer executive officer by a subsequent employer;

 

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•

A lump sum payment equal to the maximum contribution that Pioneer would have been required to make on behalf of the Pioneer executive officer to any retirement and/or deferred compensation plans in which he or she participated immediately prior to such termination as if the Pioneer executive officer had remained fully employed for 36 months (or, for Mr. Washburn, 24 months) following such termination, based on the elective deferral contribution rate that the Pioneer executive officer had made under such plans in the last complete calendar year preceding such termination;

 

•

If the Pioneer executive officer relocated at the request of Pioneer within one year of the change in control and elects to relocate back to his or her original location following termination, relocation benefits under the relocation policy that was applicable to the original relocation;

 

•

Payment of any earned but unpaid bonus or cash incentive compensation for completed performance periods;

 

•

A lump sum payment of $30,000 in lieu of financial and tax counseling and planning assistance benefits for two years; and

 

•

Upon the executive officer’s request, outplacement services through an agency selected by Pioneer at a cost not to exceed $75,000 (or, for Mr. Washburn, $40,000), with such services provided by no later than 12 months following such termination.

Mr. Sheffield will commence a new, non-executive position as Special Advisor to the Chief Executive Officer of Pioneer on January 1, 2024 (the “Transition Date”) and will serve in such position until the closing of the Merger and will continue as an employee and as a member of the Pioneer board following the Transition Date. As of the Transition Date, Mr. Sheffield will not receive a base salary, and will not be eligible for future annual cash bonus awards or equity awards, but he will continue to vest in all outstanding equity awards in accordance with their terms. Mr. Sheffield will be eligible for the termination benefits described above under his CIC Agreement upon the expiration of his transition services effective as of the closing of the Merger, which will be considered a termination of his employment by Pioneer without cause. Any termination benefits provided to Mr. Sheffield will be determined by reference to his base salary, target bonus amounts and retirement plan participation as in effect on October 10, 2023.

To the extent any payment or benefit under the CIC Agreements is delayed to comply with Section 409A of the Code, the amount is to be contributed to a grantor trust, with such amount to be invested through such trust in U.S. Treasury securities or money market investments, and the executive officer would be paid any earnings accrued on the amount during the required delay period.

The CIC Agreements do not contain tax gross-up provisions with respect to excise taxes under Section 4999 of the Code. Instead, the severance and other benefits provided under the CIC Agreements are subject to a “best-of-net” provision in the event of excess parachute payments under Section 280G of the Code. In the event excise taxes under Section 4999 of the Code would be imposed on payments made under the CIC Agreements, the Pioneer executive officer will either pay the excise tax or have his or her payments and benefits reduced to an amount at which an excise tax no longer applies, based on which result is more favorable to the Pioneer executive officer on an after-tax basis.

For purposes of the CIC Agreements:

 

•

“Cause” generally means the Pioneer executive officer’s (a) continued failure to substantially perform his or her duties and responsibilities or to comply with any material written policy of Pioneer, subject to notice and a 10 business day cure period; (b) engaging in acts of gross misconduct that result in or are intended to result in material damage to Pioneer’s business or reputation; (c) failure to cooperate in any internal or external investigation or proceeding into the business practices or operations of Pioneer; or (d) conviction of (or plea of guilty or nolo contendere to a charge of) any felony or any crime or misdemeanor involving moral turpitude or financial misconduct that results in significant monetary damage to Pioneer.

 

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•

“Good reason” generally means the occurrence of any of the following without the Pioneer’s executive officer’s written consent: (a) assignment of duties inconsistent in any material adverse way, or other material adverse change in, his or her titles, position, authority, responsibilities, status, powers, functions or the budget over which the Pioneer executive officer retains authority, which, in the case of any officer of Pioneer, shall be deemed to have occurred unless, following the closing of the Merger, the Pioneer executive officer holds a position with ExxonMobil that is substantially comparable to the position he or she held with Pioneer immediately prior to the closing of the Merger; (b) reduction in base salary; (c) failure to provide the Pioneer executive officer with an opportunity to receive an annual bonus ranging from 100% of target, at target levels of performance, to 200% of target, at superior levels of performance; (d) reduction in annual long-term incentive compensation value from the average value granted to the Pioneer executive officer for the preceding three years; (e) reduction in the aggregate value of employee benefits; (f) relocation by more than 50 miles; or (g) failure of ExxonMobil to assume and perform the CIC Agreement.

The estimated aggregate value of severance payments and benefits provided to Pioneer’s executive officers (including Pioneer’s named executive officers) under the CIC Agreements assuming that (a) the Merger closed on November 17, 2023, (b) each Pioneer executive officer experiences a qualifying termination immediately following consummation of the Merger (and Pioneer provides the requisite 30 days’ notice of such termination), and (c) each Pioneer executive officer has complied with all requirements necessary in order to receive all payments and benefits (for further information regarding these assumptions, please see below under “—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers”), is approximately $49,901,778. For the estimated severance values associated with a qualifying termination of the Pioneer named executive officers, see below under “—Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers”.

Pioneer Non-Qualified Deferred Compensation Plan

Each of the Pioneer executive officers participates in Pioneer’s non-qualified deferred compensation plan, under which all account balances are fully vested at all times. In the event of a change in control of Pioneer (including the Merger), the full balance of each Pioneer executive officer’s account under the non-qualified deferred compensation plan will be paid in a single lump sum cash payment.

Agreements with ExxonMobil Following the Merger

As of the date of this proxy statement, none of Pioneer’s executive officers has entered into any new agreement, arrangement or understanding with ExxonMobil or any of its affiliates regarding the terms and conditions of compensation, incentive pay or employment with Pioneer after the Merger. Although no agreements have been entered into at this time with any of Pioneer’s executive officers, prior to or following the completion of the Merger, they may enter into new agreements and/or amendments to existing employment or severance agreements regarding their employment with Pioneer after the Merger.

Quantification of Potential Payments and Benefits to Pioneer’s Named Executive Officers

The information set forth below is required by Item 402(t) of Regulation S-K regarding compensation that is based on or otherwise relates to the Merger that the Pioneer named executive officers could receive in connection with the Merger. Such amounts have been calculated assuming that (a) the Merger closed on November 17, 2023, (b) the value per share of Pioneer common stock on consummation of the Merger is $248.90 (which, in accordance with SEC requirements, is equal to the average closing price of a share of Pioneer common stock over the first five business days following the first public announcement of the Merger), (c) each Pioneer named executive officer experiences a qualifying termination immediately following consummation of the Merger (and Pioneer provides the requisite 30 days’ notice of such termination), and (d) each Pioneer named executive officer has complied with all requirements necessary in order to receive all payments and benefits.

 

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The payments and benefits described below are calculated based on, to the extent applicable, the terms of the Merger Agreement and each Pioneer named executive officer’s existing CIC Agreement. See “—Treatment of Pioneer Equity Awards in the Merger” and “—Change in Control Agreements” above, for a description of the treatment of the equity awards held by the Pioneer named executive officers and the terms of their CIC Agreements. The actual amounts payable to each Pioneer named executive officer will depend on whether he experiences a qualifying termination, the date of such termination (if applicable) and the terms of the plans or agreements in effect at such time and may materially differ from the amounts set forth below. In addition, while the calculations below assume the Merger occurred on November 17, 2023 as required by SEC rules, the Merger is not expected to close until 2024. As a result, the below table includes certain equity awards held by the below individuals that already vested and settled on December 15, 2023 as described under “—Treatment of Pioneer Equity Awards in the Merger” above. All such equity awards are included in the calculations below. Furthermore, additional restricted stock units may be granted to the executive officers in respect of 2024, as described under “—Treatment of Pioneer Equity Awards in the Merger” above. Such restricted stock units are not included in the calculations below.

 

Name		Cash ($)(1)				Equity ($)(2)				Pension/ NQDC ($)(3)				Perquisites/ Benefits ($)(4)				Total ($)
Scott D. Sheffield		$	13,771,685			$	111,339,477			$	—			$	710,786			$	125,821,948
Richard P. Dealy		$	5,414,320			$	36,235,103			$	—			$	680,307			$	42,329,730
Neal H. Shah		$	3,861,607			$	18,318,577			$	—			$	860,628			$	23,040,812
Mark S. Berg		$	3,593,082			$	20,985,833			$	—			$	428,786			$	25,007,701
J.D. Hall		$	3,593,082			$	21,045,071			$	—			$	654,446			$	25,292,599

 

(1)

These amounts reflect the cash severance payment payable under the CIC Agreements with each Pioneer named executive officer described under “—Change in Control Agreements” above in the event of a qualifying termination of his employment immediately following the Merger on November 17, 2023. Such cash severance is “double-trigger”, which means that a Pioneer named executive officer must experience a qualifying termination within the following time period in order to receive it: (i) on or within two years following a change in control of Pioneer, (ii) following a potential change in control of Pioneer (so long as the change in control of Pioneer occurs within 12 months after such termination) or (iii) if ExxonMobil does not provide a Pioneer named executive officer notice of such named executive officer’s future position and city of job location on or prior to the 18-month anniversary following the closing of the Merger, then on or prior to the six-month anniversary of the date that ExxonMobil provides such notice to such named executive officer. Details of the cash payments are shown in the following supplemental table:

 

Name		2.99x Salary & Bonus ($)				Pro-Rated Target Bonus ($)				Total ($)
Scott D. Sheffield		$	11,661,000			$	2,110,685			$	13,771,685
Richard P. Dealy		$	4,738,901			$	675,419			$	5,414,320
Neal H. Shah		$	3,401,873			$	459,734			$	3,861,607
Mark S. Berg		$	3,174,463			$	418,619			$	3,593,082
J.D. Hall		$	3,174,463			$	418,619			$	3,593,082

 

(2)

These amounts reflect the value of Pioneer RSUs, Pioneer Restricted Stock and Pioneer Performance Units, as described under “—Treatment of Pioneer Equity Awards in the Merger” above. The Pioneer RSUs, Pioneer Restricted Stock and Pioneer Performance Units outstanding as of the date of the Merger Agreement that remain outstanding as of the closing of the Merger will fully vest upon the Merger (and such vesting is therefore pursuant to a “single-trigger” arrangement), with the Pioneer Performance Units deemed earned based on maximum performance levels, taking into account all dividend equivalents accrued in respect of the shares of Pioneer common stock underlying Pioneer Performance Units, which will be paid in

 

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