SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
TRITON ENERGY LIMITED
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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TRITON ENERGY LIMITED
CALEDONIAN HOUSE, JENNETT STREET
P. O. BOX 1043
GEORGE TOWN
GRAND CAYMAN, CAYMAN ISLANDS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Triton
Energy Limited (the "Company") will be held at 10:00 a.m., Dallas time, on
Tuesday, May 16, 2000, at the Royal Oaks Country Club, 7915 Greenville Avenue,
Dallas, Texas 75231. The purposes of the meeting are:
(1) To elect three directors to serve until the Annual Meeting of
Shareholders in 2003, or until their respective successors shall have been
duly elected and qualified; and
(2) To consider and act upon such other matters as may properly come before
the meeting.
Only holders of record of Ordinary Shares and 8% Convertible Preference
Shares at the close of business on March 27, 2000, are entitled to receive
notice of and to vote at the meeting, or any adjournment or adjournments
thereof. The meeting may be adjourned from time to time without notice other
than announcement at the meeting.
Information concerning the matters to be acted upon at the meeting is set
forth in the accompanying Proxy Statement.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN AS PROMPTLY AS POSSIBLE THE ENCLOSED PROXY CARD
IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors
Thomas J. Murphy
Secretary
April 3, 2000
TRITON ENERGY LIMITED
CALEDONIAN HOUSE, JENNETT STREET
P. O. BOX 1043
GEORGE TOWN
GRAND CAYMAN, CAYMAN ISLANDS
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
_____________________
SOLICITATION AND REVOCABILITY OF PROXIES
Triton Energy Limited (the "Company") is furnishing this Proxy Statement to
shareholders in connection with the Company's solicitation, by order of its
Board of Directors, of proxies to be voted at the 2000 Annual Meeting of
Shareholders of the Company (together with any and all adjournments, the
"Meeting"). The Meeting will be held at the Royal Oaks Country Club, 7915
Greenville Avenue, Dallas, Texas 75231, on Tuesday, May 16, 2000, commencing at
10:00 a.m., Dallas time. This Proxy Statement, the Notice of Annual Meeting and
the accompanying proxy card are first being mailed on or about April 3, 2000.
At the Meeting, the Company is asking its shareholders to consider and act
upon (i) the election of three directors to serve until the Annual Meeting of
Shareholders in 2003, or until their successors have been duly elected and
qualified; and (ii) such other matters as may properly come before the Meeting
or any adjournment of the Meeting.
If you specify in your proxy how your shares are to be voted, the persons
named in the enclosed proxy will vote your shares accordingly. You may revoke
your proxy at any time before it is voted by executing and delivering a later
dated proxy relating to your shares. You may also revoke your proxy by attending
the Meeting in person and voting by ballot (attending the Meeting without
executing a ballot will not constitute revocation of a proxy). If you execute
and return the enclosed proxy, but do not specify how your shares are to be
voted, the persons named in the enclosed proxy will vote your shares (i) FOR the
election of the three individuals nominated by the Board of Directors and (ii)
at their discretion with regard to any other matters that may properly come
before the Meeting.
Management of the Company does not know of any other matters that are
likely to be brought before the Meeting. However, if any other matters do
properly come before the Meeting, the persons named in the enclosed proxy will
vote the proxy in accordance with their best judgment.
RECORD DATE AND VOTING
The close of business on March 27, 2000, is the record date (the "Record
Date") for determining the shareholders entitled to vote at the Meeting. The
Company's Ordinary Shares and 8% Convertible Preference Shares are the only
voting securities entitled to be voted at the Meeting. Each Ordinary Share is
entitled to one vote on any matter to come before the Meeting and each 8%
Convertible Preference Share is entitled to four votes on any matter to come
before the Meeting. As of the Record Date, there were outstanding 36,041,686
Ordinary Shares and 5,188,787 8% Convertible Preference Shares.
The presence at the Meeting, in person or by proxy, of the holders of at
least a majority of the Ordinary Shares and 8% Convertible Preference Shares
entitled to vote as of the Record Date, taken together, is necessary to
constitute a quorum. Each Ordinary Share and 8% Convertible Preference Share
represented at the Meeting, in person or by proxy, will be counted toward a
quorum. If a quorum is not present, the Meeting may be adjourned from time to
time until a quorum is obtained.
Approval of the proposal to elect the three nominees to serve as directors
requires the affirmative vote of the holders of a plurality of the Ordinary
Shares and 8% Convertible Preference Shares, voting together as a single class,
represented and voting at the Meeting. On the enclosed proxy, you may vote your
shares in favor of the Board's nominees or withhold your votes as to one or more
nominees. Votes that are withheld will be excluded entirely from the vote and
will have no effect. Shareholders have no appraisal or similar rights with
respect to any matter scheduled to be voted on at the Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Articles of Association provide for a board of directors
divided into three classes, with the term of office of one class expiring each
year at the Company's Annual Meeting of Shareholders. Each class of directors is
elected for a term of three years except in the case of elections to fill
vacancies. The following is certain information concerning each of the nominees
for election as a director, as well as information concerning those directors of
the Company whose terms continue following the Meeting. The Company does not
know of any family relationships between the directors and the officers of the
Company.
NOMINEES FOR DIRECTOR - TERM EXPIRING 2003
The Board of Directors has nominated each of Sheldon R. Erikson, Thomas O.
Hicks and John R. Huff for election at the Meeting to serve as directors for a
term expiring at the Annual Meeting of Shareholders in 2003, or until his
successor has been duly elected and qualified. Each of the nominees has
indicated that he is willing to continue to serve as a member of the Board if
elected. If any nominee becomes unavailable for election for any reason, the
proxy holders will have discretionary authority to vote for a substitute
nominee. Mr. Hicks was designated for nomination by HM4 Triton, L.P., a
partnership affiliated with Hicks, Muse, Tate & Furst Incorporated ("Hicks
Muse"), pursuant to a Shareholders Agreement between HM4 Triton, L.P. and the
Company. See "Management Compensation - Compensation Committee Interlocks and
Insider Participation and Certain Transactions."
The following is a summary of the background of each of the nominees for
election at the Meeting:
Sheldon R. Erikson (age 58). Mr. Erikson has served as a director of the
Company since 1995. Mr. Erikson has served as Chairman, President and Chief
Executive Officer of Cooper Cameron Corporation, a petroleum and industrial
equipment company, since January 1995 and has served as a director of that
corporation since March 1995. Mr. Erikson was the Chairman of the Board from
1988 to 1995, and President and Chief Executive Officer from 1987 to 1995, of
The Western Company of North America, an oil and gas service company. Mr.
Erikson is also a director of Layne Christensen Company and Spinnaker
Exploration Company.
Thomas O. Hicks (age 54). Mr. Hicks has served as Chairman of the Board of
Directors of the Company since October 1998. Mr. Hicks has served as Chairman of
the Board and Chief Executive Officer of Hicks Muse since 1989. Hicks Muse is a
private investment firm located in Dallas, New York, St. Louis, Mexico City and
London, specializing in strategic investments, leveraged acquisitions and
recapitalizations. From 1984 to May 1989, Mr. Hicks was Co-Chairman of the Board
and Co-Chief Executive Officer of Hicks & Haas Incorporated, a Dallas-based
private investment firm. Mr. Hicks also serves as a director of AMFM Inc.,
Cooperative Computing, Inc., Home Interiors & Gifts, Inc., International Home
Foods, Inc., Lamar Advertising Company, LIN Holdings Corp., LIN Television
Corporation, Mumm Perrier-Jouet, Regal Cinemas, Inc., Sybron International
Corporation, Teligent, Inc. and Viasystems Group, Inc.
John R. Huff (age 54). Mr. Huff has served as a director of the Company
since 1995. Mr. Huff has served as President and Chief Executive Officer of
Oceaneering International, Inc., a company providing engineering and
intervention services primarily for underwater operations, since August 1986,
and as Chairman of Oceaneering International, Inc. since 1990. Mr. Huff is also
a director of BJ Services Company and Suncor Corp.
CONTINUING DIRECTORS - TERM EXPIRING 2001
The current Class III directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at the Company's Annual
Meeting of Shareholders in 2001, are as follows:
Fitzgerald S. Hudson (age 75). Mr. Hudson has served as a director of the
Company since 1992. Mr. Hudson's principal occupation since 1991 has been his
position as general partner of Hudson Group Partners, a family investment
partnership. From 1990 to 1991 Mr. Hudson was Chairman of the construction
division of Willis Corroon, an insurance brokerage firm.
James C. Musselman (age 52). Mr. Musselman was elected director of the
Company in May 1998, and was elected Chief Executive Officer in October 1998.
Mr. Musselman has served as Chairman, President and Chief Executive Officer of
Avia Energy Development, LLC, a private company engaged in gas processing and
drilling, since September 1994. From June 1991 to September 1994, Mr. Musselman
was the President and Chief Executive Officer of Lone Star Jockey Club, LLC, a
company formed to organize a horse racetrack facility in Texas.
C. Lamar Norsworthy (age 53). Mr. Norsworthy has served as a director of
the Company since 1998. Mr. Norsworthy has served as Chairman of the Board and
Chief Executive Officer of Holly Corporation, an independent refiner of
petroleum and petroleum derivatives, since 1979 and also served as President of
that corporation from 1988 to 1995.
CONTINUING DIRECTORS - TERM EXPIRING 2002
The current Class I directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at the Company's Annual
Meeting of Shareholders in 2002, are as follows:
Jack D. Furst (age 41). Mr. Furst has served as a director of the Company
since October 1998. Mr. Furst is a Partner of Hicks Muse. From 1987 to May 1989,
Mr. Furst was a vice president and subsequently a partner of Hicks & Haas
Incorporated. Mr. Furst also serves as a director of American Tower Corporation,
Cooperative Computing, Inc., Globix Corporation, Hedstrom Corporation, Hedstrom
Holdings, Inc., Home Interiors & Gifts, Inc., International Wire Group, Inc.,
LLS Corp. and Viasystems Group, Inc.
Michael E. McMahon (age 52). Mr. McMahon has served as a director of the
Company since 1993. Mr. McMahon has served as a partner in RockPort Partners
LLC, a merchant banking company, since June 1998. From July 1997 to June 1998,
Mr. McMahon was a Managing Director of Chase Securities, Inc., and from October
1994 until July 1997, Mr. McMahon was a Managing Director of Lehman Brothers.
Prior to joining Lehman Brothers, Mr. McMahon had been a partner in Aeneas
Group, Inc., a subsidiary of Harvard Management Company, Inc., since January
1993. Harvard Management Company, Inc. is a private investment company
responsible for managing the endowment fund of Harvard University. Mr. McMahon
was primarily responsible for the fund's energy and commodities investments. Mr.
McMahon also serves as a director of Spinnaker Exploration Company.
C. Richard Vermillion, Jr. (age 54). Mr. Vermillion has served as a
director of the Company since October 1998. Mr. Vermillion has served as
Chairman of Gammaloy Holdings L.P., an oilfield service firm, since February
1996, and as a principal of MV Partners, a private investment firm, since June
1995. From October 1993 to June 1995, Mr. Vermillion was a Managing Director of
Donaldson Lufkin & Jenrette, an investment banking firm.
J. Otis Winters (age 67). Mr. Winters has served as a director of the
Company since October 1998. Mr. Winters also served as a director of the Company
from September 1993 to May 1996. Mr. Winters was co-founder of PWS Group
(formerly known as Pate, Winters & Stone, Inc.), a consulting firm, in 1989.
Since 1989 he has served as Chairman of that company. Mr. Winters also serves as
a director of Dynegy, Inc., AMFM, Inc. and Panja Corporation.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 1999, the Board of Directors met or acted by written consent six
times and each current director attended at least 75% of the aggregate of all
Board and applicable committee meetings, other than Mr. Furst, who attended
one-half of such meetings.
The Board of Directors has an Executive Committee, which has the authority,
subject to restrictions imposed by Cayman Islands law and the Company's Articles
of Association, to act for the Board of Directors. Messrs. Musselman (Chairman),
Erikson, Furst and Hicks currently are members of the Executive Committee. The
Executive Committee met or acted by written consent one time during 1999.
The Board of Directors has an Audit Committee, whose functions include the
selection and evaluation of the independent auditors, along with the review in
conjunction with the independent auditors of the plans and scope of the audit
engagement. The committee also reviews with the independent auditors their
objectivity and independence and the results of their examination, approves the
fee charged by the independent auditors and reviews the Company's internal
controls. Messrs. Vermillion (Chairman), Hudson, Norsworthy and Winters
currently are members of the Audit Committee. The Audit Committee held seven
meetings during 1999.
The Board of Directors has a Compensation Committee, which reviews and
recommends the compensation to be paid to management, and interprets and helps
administer the various existing compensation plans of the Company. Messrs. Huff
(Chairman), Furst, Hicks, McMahon and Winters currently are members of the
Compensation Committee. The Compensation Committee met or acted by written
consent six times during 1999.
The Board of Directors has a Nominating Committee, which is authorized by
the Board of Directors to recommend nominees for election to the Board of
Directors and nominees to fill additional directorships that may be created and
to fill vacancies that may exist on the Board of Directors. Messrs. Hicks
(Chairman), Furst, McMahon and Vermillion currently are members of the
Nominating Committee. The Nominating Committee did not meet during 1999. The
Nominating Committee will consider nominees recommended by shareholders. See
"Shareholder Proposals."
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS
The following table lists, as of March 1, 2000 (except as noted below), the
beneficial ownership of the Company's shares by (i) each person known to the
Company to own 5% or more of the outstanding Ordinary Shares and 8% Convertible
Preference Shares, (ii) each director of the Company, (iii) the Company's Chief
Executive Officer and each of the Company's five other most highly compensated
executive officers during 1999 (the "named executive officers"), and (iv) the
directors and executive officers of the Company as a group. The persons named in
the table have sole voting and investment power with respect to all capital
shares owned by them, unless otherwise noted.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
------------------------------------------------------------------------
ORDINARY SHARES 8% PREFERENCE SHARES
------------------------------------------------ ----------------------
PERCENT OF
NUMBER OF PERCENT OF NUMBER OF PERCENT OF TOTAL VOTING
BENEFICIAL OWNER SHARES (1) CLASS SHARES CLASS POWER
- ---------------- -------------------------- -------------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
5% SHAREHOLDERS:
HM4 Triton, L.P. 21,960,448 (2) 38.9% 5,131,549 98.9% 38.7%
c/o Hicks, Muse,
Tate & Furst
Incorporated
200 Crescent Court
Suite 600
Dallas, Texas 75201
Barrow, Hanley, Mewhinney 3,450,330 (3) 9.6 --- --- 6.1
& Strauss, Inc.
One McKinney Plaza
3232 McKinney Avenue
15th Floor
Dallas, Texas 75204
DIRECTORS AND EXECUTIVE
OFFICERS:
Thomas O. Hicks (4) 22,259,709 39.4 5,131,549 98.9 39.3
Sheldon R. Erikson 198,000 * --- --- *
Jack D. Furst 3,535 * --- --- *
Fitzgerald S. Hudson 265,740 (5) * --- --- *
John R. Huff 154,000 (6) * 1,000 * *
Michael E. McMahon 163,500 * --- --- *
C. Lamar Norsworthy 87,500 * --- --- *
C. Richard Vermillion, Jr. 46,000 * --- --- *
J. Otis Winters 75,000 * --- --- *
James C. Musselman 200,699 * --- --- *
A. E. Turner, III 198,373 * --- --- *
W. Greg Dunlevy 35,779 * --- --- *
Marvin Garrett 21,994 * --- --- *
Bernard Gros-Dubois 49,030 * --- --- *
Brian Maxted 51,000 * --- --- *
All directors and executive
officers as a group (15
persons) 23,809,859 (7) 41.2 5,132,549 98.9 42.0
- -------------------
* less than 1%
</TABLE>
(1) Includes shares held for the account of the named executive officers
pursuant to the Company's 401(k) savings plan, shares held by or for the benefit
of wives and minor children of directors and executive officers and entities in
which directors or executive officers hold a controlling interest, and includes
the number of shares indicated as follows that are issuable upon exercise of
stock options that are exercisable or exercisable within 60 days from April 1,
2000: Mr. Erikson, 195,000 shares; Mr. Hudson, 180,000 shares; Mr. Huff, 135,000
shares; Mr. McMahon, 157,500 shares; Mr. Norsworthy, 52,500 shares; Mr.
Vermillion, 45,000; Mr. Winters, 75,000 shares; Mr. Musselman, 181,667 shares;
Mr. Turner, 194,666 shares; Mr. Dunlevy, 26,917 shares; Mr. Garrett, 17,250
shares; Mr. Gros-Dubois, 43,417 shares; Mr. Maxted, 51,000 shares; and the
directors and executive officers as a group, 1,354,917 shares. Includes shares
issuable upon exercise of options owned by trusts and family partnerships
established for the benefit of the family members of certain directors and
executive officers as to which such directors and executive officers disclaim
beneficial ownership.
(2) Includes an aggregate of 20,526,196 Ordinary Shares into which the
5,131,549 8% Convertible Preference Shares held by HM4 Triton, L.P. could be
converted.
(3) Based on a Schedule 13G filed with the Securities and Exchange
Commission dated February 9, 2000. The Schedule 13G did not report the
ownership of any 8% Convertible Preference Shares.
(4) Share ownership includes all of the shares beneficially owned by HM4
Triton, L.P. Mr. Hicks is a controlling person of the general partner of HM4
Triton, L.P. and as such, may be deemed to be the beneficial owner of the shares
owned by HM4 Triton, L.P. Mr. Hicks disclaims beneficial ownership to the shares
owned directly by HM4 Triton, L.P. In addition, Mr. Hicks' share ownership
includes 665 shares held as trustee of certain trusts for the benefit of his
children, and 3,141 shares held by two partnerships whose general partners are
controlled by Mr. Hicks.
(5) Includes 45,740 shares held by partnerships in which Mr. Hudson owns a
1% interest and for which Mr. Hudson serves as general partner.
(6) The number of Ordinary Shares beneficially owned includes the 4,000
Ordinary Shares Mr. Huff could acquire by converting the 8% Convertible
Preference Shares he owns.
(7) Includes Ordinary Shares issuable upon conversion of 8% Convertible
Preference Shares.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid or accrued for services rendered during 1999, 1998 and 1997 to the
Company's Chief Executive Officer and each of the named executive officers,
based on salary and bonus earned during 1999.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
AWARDS PAYOUTS
--------------------- ----------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
----------------------------------------- RESTRICTED OPTIONS/ ALL OTHER
NAME AND FISCAL OTHER ANNUAL STOCK SARS LTIP COMPENSATION
PRINCIAL POSITION YEAR SALARY($) BONUS($) COMPENSATION (1) AWARDS(S) (#)(2) PAYOUTS ($)
- ----------------- ------ ---------- ----------- ---------------- --------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2,500
James C. Musselman (3) 1999 500,000 495,000 ---- ---- 350,000 ----
Chief Executive Officer 1998 132,000 ---- ---- ---- 315,000 ---- ----
1997 ---- ---- ---- ---- ---- ---- ----
A. E. Turner, III 1999 350,000 262,500 ---- ---- 170,000 ---- 17,232 (4)
Chief Operating Officer 1998 350,000 200,000 ---- ---- 203,000 ---- 16,337
1997 300,000 100,000 ---- ---- 75,000 ---- 14,547
W. Greg Dunlevy 1999 174,720 87,360 ---- ---- 85,000 ---- 11,984 (5)
Vice President, Investor 1998 174,720 38,104 ---- ---- 57,250 ---- 11,470
Relations and Treasurer 1997 167,787 33,280 ---- ---- ---- ---- 10,722
Marvin Garrett 1999 146,156 75,000 ---- ---- 65,000 ---- 8,769 (6)
Vice President, Production 1998 136,822 10,262 ---- ---- 36,750 ---- 8,209
1997 126,457 31,096 ---- ---- ---- ---- 7,587
Bernard Gros-Dubois (7) 1999 176,960 70,784 ---- ---- 73,000 ---- 13,352
Vice President and General 1998 156,543 38,272 ---- ---- 62,250 ---- 13,241
Manager, Kuala Lumpur 1997 136,327 27,040 ---- ---- ---- ---- 12,714
Brian Maxted (8) 1999 170,000 102,000 ---- ---- 125,000 ---- 4,800
Vice President, Exploration 1998 170,000 69,420 ---- ---- 120,500 ---- 4,800
1997 135,960 33,990 ---- ---- ---- ---- 146,733
</TABLE>
- --------------------
(1) Excludes perquisites and other personal benefits if in total they do not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for the named executive officer.
(2) Options to acquire Ordinary Shares.
(3) Mr. Musselman was elected a director of the Company in May 1998 and
became Chief Executive Officer in October 1998. Compensation for 1998 includes
directors fees aggregating $7,000 paid to Mr. Musselman while he was a
non-employee director (through October 1998). The All Other Compensation amount
for 1999 consists of $2,500 in Company contributions to the Company's 401(k)
savings plan for Mr. Musselman's benefit.
(4) Consists of $9,600 in Company contributions to the Company's 401(k)
savings plan and $7,632 in respect of life insurance premiums for Mr. Turner's
benefit.
(5) Consists of $10,000 in Company contributions to the Company's 401(k)
savings plan and $1,984 in respect of life insurance premiums for Mr. Dunlevy's
benefit.
(6) Consists of $8,769 in Company contributions to the Company's 401(k)
savings plan for Mr. Garrett's benefit.
(7) Mr. Gros-Dubois served as Vice President, Finance during 1999, and, in
December 1999, accepted the assignment as general manager of the Company's Kuala
Lumpur operation in Malaysia. The All Other Compensation amount for 1999
consists of $8,599 in Company contributions to the Company's 401(k) savings plan
and $4,753 in respect of life insurance premiums for Mr. Gros-Dubois benefit.
(8) The All Other Compensation amount for 1999 consists of $4,800 in respect
of life insurance premiums for Mr. Maxted's benefit. The All Other Compensation
amount for 1997 consists primarily of certain bonus payments and the
reimbursement of certain expenses in connection with Mr. Maxted's overseas
assignment in accordance with the Company's expatriate employee policies.
OPTION GRANTS IN 1999
The following table provides information regarding options granted to the
named executive officers relating to performance during the year ended December
31, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS/ ANNUAL RATES OF STOCK
SECURITIES SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE -----------------------
GRANTED(#)(2) FISCAL YEAR(3) ($/SH)(4) EXPIRATION DATE 0% 5%($) 10%($)
------------- -------------- ------------ --------------- ----- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
James C. Musselman 200,000 10.9 14.50 5/20/2004 --- 242,840 1,065,881
150,000 8.2 14.50 9/24/2004 --- 277,851 920,199
A. E. Turner, III 20,000 1.1 14.50 5/20/2004 --- 24,284 106,588
150,000 8.2 14.50 9/24/2004 --- 277,851 920,199
W. Greg Dunlevy 10,000 0.5 14.50 5/20/2004 --- 12,142 53,294
75,000 4.1 14.50 9/24/2004 --- 138,925 460,099
Marvin Garrett 5,000 0.3 14.50 5/20/2004 --- 6,071 26,647
60,000 3.3 14.50 9/24/2004 --- 111,140 368,080
Bernard Gros-Dubois 10,000 0.5 14.50 5/20/2004 --- 12,142 53,294
63,000 3.4 14.50 9/24/2004 --- 116,697 386,484
Brian Maxted 15,000 0.8 14.50 5/20/2004 --- 18,213 79,941
110,000 6.0 14.50 9/24/2004 --- 203,757 674,813
</TABLE>
- -----------------------
(1) Under the rules of the Securities and Exchange Commission, the
"potential realizable value" of a stock option is calculated by assuming that
the market price of the underlying Ordinary Shares on the date the stock option
was granted appreciates at an annual compounded rate of 5% and 10%,
respectively, over the terms of the options, irrespective of the current price
of the Ordinary Shares. These numbers do not take into account provisions of
certain options providing for termination of the option following termination of
employment.
(2) The options granted in 1999 have a term of five years and vest one-third
per year. In the event of a change of control of the Company, any unexercisable
portions of options become immediately exercisable. For the purposes of the
Company's stock option plans, "change in control" has the same definition as
that for the Company's Supplemental Executive Retirement Plan, which is set
forth in the discussion following the Pension Plan Table below.
(3) Options are calculated as a percentage of the sum of all options granted
to employees in 1999 (excluding options granted in 1999 to non-employee
directors).
(4) In the case of each grant, the exercise price was greater than the
closing price of the Ordinary Shares on the date of grant. On May 20, 1999, the
closing price was $12.31 and on September 24, 1999, the closing price was
$12.81. The officer may pay an option's exercise price by delivering to the
Company Ordinary Shares he owns, by paying cash, or in any other form of valid
consideration or a combination of any of the foregoing, as determined by the
Compensation Committee.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
The following table provides information related to the number and value of
options held by the named executive officers at December 31, 1999. None of the
named executive officers exercised options during 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT FY-END (#) AT FY-END ($)(1)
ACQUIRED ON VALUE --------------------------- --------------------------
EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ----------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James C. Musselman ---- ---- 115,000 550,000 $612,500 $3,368,750
A. E. Turner, III ---- ---- 187,999 280,001 301,771 1,522,291
W. Greg Dunlevy ---- ---- 23,583 101,667 125,177 584,167
Marvin Garrett ---- ---- 15,583 81,667 76,177 461,667
Bernard Gros-Dubois ---- ---- 40,083 89,667 267,365 510,667
Brian Maxted ---- ---- 42,250 186,250 178,000 956,250
</TABLE>
- ------------------------
(1) Value at fiscal year end is calculated based on the difference between
the option exercise price and the closing market price of the Ordinary Shares at
December 31, 1999, multiplied by the number of shares to which the option
relates. On December 31, 1999, the closing price was $20.625.
PENSION PLAN TABLE
The following table lists estimated annual benefits payable upon retirement
under the Company's Retirement Income Plan ("Retirement Plan"), including
amounts attributable to the Company's Supplemental Executive Retirement Plan
("SERP"), to participants with varying average earnings levels and years of
service.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
-------------------------------------------
REMUNERATION 10 15 20 25 30
- ------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
150,000 58,252 59,232 60,212 61,192 62,172
200,000 83,252 84,276 85,300 86,324 87,348
250,000 108,252 109,276 110,300 111,324 112,348
300,000 133,252 134,276 135,300 136,324 137,348
350,000 158,252 159,276 160,300 161,324 162,348
400,000 183,252 184,276 185,300 186,324 187,348
450,000 208,252 209,276 210,300 211,324 212,348
500,000 233,252 234,276 235,300 236,324 237,348
550,000 258,252 259,276 260,300 261,324 262,348
600,000 283,252 284,276 285,300 286,324 287,348
650,000 308,252 309,276 310,300 311,324 312,348
700,000 333,252 334,276 335,300 336,324 337,348
</TABLE>
Payments made under the Retirement Plan and SERP are based on years of
service and annual earnings. Salary and wages are included in the calculation of
average earnings, but bonuses, overtime, severance pay and fringe benefits are
excluded. The SERP generally provides that a participant may elect to receive
benefits under the SERP in equal monthly installments over a period of 20 years.
The Company has purchased life insurance to fund a portion of its obligations
under the SERP.
Under the Retirement Plan, the benefit a participant is entitled to receive
at his normal retirement date (age 65) is equal to .8% of his average monthly
compensation multiplied by his years of service, not to exceed 30 years, plus
.65% of his excess average monthly compensation multiplied by his years of
service, not to exceed 30 years. The Retirement Plan also provides an optional
early retirement benefit under which a participant may qualify for a reduced
pension after reaching age 55 and the completion of five years of service.
The SERP provides supplemental retirement benefits to selected employees.
The benefit levels under the SERP upon normal (age 60) or early retirement are
based on the participant's final average compensation at retirement reduced by
the participant's accrued benefit under the Retirement Plan and further reduced
by the participant's primary Social Security benefits. The offset for Social
Security does not apply to any benefit payable before a participant reaches the
age of 62. The normal retirement benefit is 50% of average compensation less
100% of anticipated social security less the Retirement Plan benefit multiplied
by the accrual percentage. The accrual percentage is 10% for each completed year
of service up to 100%. In the event of a change in control, the participant will
become fully accrued in the SERP benefit, the benefit will be distributed as a
lump sum, and the participant will receive an additional payment as a "gross-up"
to cover tax liabilities such that the net lump sum benefit is retained by the
participant. There will be deemed to be a change of control if any of the
following occurs:
- - the consummation of a merger or other form of business combination of the
Company in which (1) the Company is not the surviving corporation or (2) where
the Company is the surviving corporation, the Company's Ordinary Shares would be
converted into cash, securities or other property, or the holders of the
Company's Ordinary Shares immediately prior to the business combination would
represent less than a majority of the common stock of the surviving corporation
immediately after the business combination,
- - the sale of all or substantially all of the Company's assets,
- - the shareholders of the Company approve a plan of liquidation of the Company,
- - any person or group becomes, without the prior approval of the Board of
Directors, a beneficial owner of securities of the Company representing 25% or
more of the Company's then outstanding securities having the right to vote in
the election of directors, or
- - during any period of two consecutive years, individuals who, at the
beginning of such period constituted the entire Board, cease for any reason
(other than death) to constitute a majority of the directors of the Company,
unless the nomination for election of each new director was approved by a vote
of at least two-thirds of the directors then still in office.
For 1999, the remuneration included in the computation of annual earnings
under the Retirement Plan and the SERP for each of the executive officers named
in the Summary Compensation Table was as follows: James C. Musselman, $500,000;
A. E. Turner, III, $347,308; W. Greg Dunlevy, $174,720; Marvin Garrett,
$146,156; Bernard Gros-Dubois, $176,960; and Brian Maxted, $170,000. The years
of credited service under the Retirement Plan and the SERP for each of those
individuals were as follows: James C. Musselman, 1; A. E. Turner, III, 6; W.
Greg Dunlevy, 7; Marvin Garrett, 5; Bernard Gros-Dubois, 14; and Brian Maxted,
6.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
General. The Compensation Committee of the Board of Directors of the
Company is composed of non-employee directors. The Compensation Committee, as
part of its review and consideration of executive compensation, takes into
account, among other things, the following goals:
- - Provision of incentives and rewards that will attract and retain highly
qualified and productive people;
- - Motivation of employees to high levels of performance;
- - Differentiation of individual pay based on performance;
- - Ensuring external competitiveness and internal equity; and
- - Alignment of Company, employee and shareholder interests.
The principal components of executive compensation are base pay,
discretionary bonus, and long-term incentives in the form of stock options.
Executive compensation also includes various benefit and retirement programs.
Each element has a somewhat different purpose and all of the determinations of
the Compensation Committee regarding the appropriate form and level of executive
compensation, including the compensation of the Chief Executive Officer,
historically have been negotiated with newly retained executives and thereafter
reviewed and adjusted based on the Compensation Committee's ongoing assessment
and understanding of the oil and gas business and the Company's relative
position in that business, and the Company and the Company's executive officers.
Management Compensation for 1999
In late 1998, following the investment in the Company led by Hicks Muse,
the Company underwent a significant restructuring of its management team. Mr.
Musselman, who had first become affiliated with the Company as a non-employee
director in May 1998, was elected President and Chief Executive Officer in
October 1998. In early 1999, Mr. Turner took on the additional responsibilities
of Chief Operating Officer. Following the capital infusion led by Hicks Muse, in
early 1999, management presented to the Board, and the Board approved, a
strategy to maximize the value of the Company to its shareholders through
controlling costs and prioritizing exploration activities, conserving capital,
strategically growing the Company through selective acquisitions and/or
internally generated growth, and instituting a share repurchase program and
other strategies to enhance shareholder value.
During 1999, the Compensation Committee believes that management
successfully executed that strategy by accomplishing the following goals:
- - improved profitability and cash flow - while the Company benefited from
improved oil prices, the Committee determined that management successfully
reduced operating and general and administrative expenses, and capital
expenditures;
- - rationalized the Company's exploration portfolio and restructured operating
commitments;
- - executed the gas sales agreement relating to the Company's interest in
Malaysia-Thailand;
- - made a strategic acquisition of the Recetor license in Colombia;
- - instituted a share repurchase program;
- - replaced produced oil and gas reserves by approximately 300%; and
- - made a significant oil discovery in Equatorial Guinea.
Accordingly, the Compensation Committee approved salary increases and
bonuses, and the grant of stock options, for the executive officers and senior
management, as well as for substantially all of the Company's employees. The
accomplishment of any one of the above goals was not, however, given greater
weight than any other in determining salary, bonus or stock option amounts.
To assist in determining the level of salary increases and bonuses to be
granted to employees, including executive officers, management engaged the
services of a compensation consulting firm to survey the practice of other
companies that the firm deemed relevant. Management did not limit the consulting
firm as to which companies to consider, and the other companies were not
necessarily the same as the companies included within the peer group selected
for purposes of the Stock Performance Chart below. In determining salary
increases, in general, management recommended to the Compensation Committee that
it approve increases of 5%, adjusted for specific employees, if necessary, to
align the employee's salary with those of comparable employees as determined by
the consulting firm. In determining bonuses, management recommended to the
Compensation Committee bonuses based on the survey by the outside consulting
firm, subject to adjustments made by management based on their subjective
determinations regarding individual performance. With regard to the bonus for
Mr. Turner, the Compensation Committee referred to the compensation plan based
on performance goals, as approved by the shareholders at the 1996 Annual
Meeting. Under that plan, Mr. Turner is eligible for a bonus of up to 75% of his
salary if his performance is deemed to be "outstanding". For the reasons
discussed above, the Committee determined that Mr. Turner's performance was
outstanding and awarded him a bonus of 75% of his salary.
In determining the level of stock options to be granted to executive
officers, in general, the Compensation Committee approved the grants recommended
by management, subject to adjustment by the Committee based on the Committee's
subjective judgment as to individual performance. The Compensation Committee
continues to believe that an emphasis on equity compensation is in the best
interests of shareholders because it more closely aligns management and
shareholder interests and maximizes the availability of cash for significant
capital expenditures. However, the Compensation Committee established the
exercise price for the stock options at $14.50, which was greater than the
closing price of the Company's Ordinary Shares as of the dates of grant, in
order to provide greater incentive to management to increase shareholder value.
Chief Executive Officer's 1999 Compensation. The Compensation Committee
determines the compensation of James C. Musselman, the Company's President and
Chief Executive Officer, and is responsible for making all decisions with regard
to his compensation. In connection with Mr. Musselman's election as interim
President and Chief Executive Officer in October 1998, the Compensation
Committee established Mr. Musselman's salary at $500,000 and approved the grant
to Mr. Musselman of 300,000 stock options at an exercise price of $14.50 per
share, which was greater than the share price on the date of grant. This package
was the result of negotiations with Mr. Musselman to induce him to accept the
additional responsibilities of Chief Executive Officer and to provide a
significant incentive to increase the value of the Company. When Mr. Musselman
was made permanent President and Chief Executive Officer in 1999, the Committee
approved the grant of 200,000 stock options, again at the exercise price of
$14.50 per share.
With regard to the 1999 bonus for Mr. Musselman, the Committee referred to
the compensation plan based on performance goals, as approved by the
shareholders at the 1996 Annual Meeting. Under that plan, the Chief Executive
Officer is eligible for a bonus of up to 100% of his salary if his performance
is deemed to be "outstanding". For the reasons discussed above, the Committee
determined that Mr. Musselman's performance was outstanding and awarded him a
bonus of 99% of his salary. In addition, the Committee approved stock options to
purchase a total of 150,000 shares, and an increase in salary of 5%, for the
reasons described above with regard to other officers.
Compensation Committee Members. This report is submitted by the members of
the Compensation Committee of the Board of Directors:
John R. Huff (Chairman) Jack D. Furst
Thomas O. Hicks Michael E. McMahon
J. Otis Winters
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Ordinary Shares during the five years
ended December 31, 1999, with (i) the cumulative total return on the S&P 500
Index and (ii) a peer group of certain oil and gas exploration and development
companies selected by the Company. The peer group selected by the Company
consists of Anadarko Petroleum Corporation, Apache Corporation, Burlington
Resources Inc., EOG Resources, Inc., Mesa Inc. (through August 7, 1997), Ocean
Energy, Inc. (Seagull Energy Corporation through March 31, 1999), Oryx Energy
Company (through the fourth quarter 1998), Pioneer Natural Resources Company
(beginning August 8, 1997), Santa Fe Snyder Corp., and Union Texas Petroleum
Holdings, Inc. (through June 29, 1998). The comparison assumes $100 was invested
on December 31, 1994 in the Company's Ordinary Shares and in each of the
foregoing indices and assumes reinvestment of dividends.
The returns of each issuer in the foregoing group have been weighted
according to the respective issuer's stock market capitalization as of the
beginning of each period.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Based upon an initial investment of $100 on December 31, 1994
with dividends reinvested
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Custom Composite Index
Triton Energy Ltd. S&P 500-Registerd Trademark (10 Stocks)
<S> <C> <C> <C>
Dec-94 100 100 100
Dec-95 169 138 119
Dec-96 143 169 148
Dec-97 86 226 139
Dec-98 23 290 102
Dec-99 61 351 112
Source: Georgeson Shareholder Communications, Inc.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into Employment Agreements with Messrs. Turner,
Dunlevy, Garrett, Gros-Dubois and Maxted. Among other provisions, Mr. Turner's
agreement provides that he would be entitled to receive certain benefits in the
event of the termination of his employment. If, following a change of control,
his employment is terminated for a reason other than (a) his death, disability
or retirement, (b) for cause, or (c) his voluntary termination other than for
good reason, he would be entitled to receive a lump sum severance payment equal
to the sum of the following amounts: (i) three times the sum of (x) the highest
annual base salary in any of the three preceding years, (y) the highest of the
aggregate bonuses in any of the preceding three years and (z) the highest of the
contributions made by the Company on his behalf in respect of the Company's
401(k) plans in any of the three preceding years; (ii) an amount equal to the
lump sum payment to which he would be entitled under the SERP in the event of a
change in control as defined in the SERP (in lieu of further payments under the
SERP); (iii) certain relocation and indemnity payments; (iv) the present value
of the difference in retirement benefit to which he would have been entitled if
he would have accumulated three additional years of service after the date of
termination; and (v) in the event he is subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, as a result of
the change of control, an additional "gross-up" amount such that, after payment
of such excise tax, and any other taxes on such additional amount, he would be
entitled to a net amount equal to the amounts set forth in the agreement. In
addition, in the event of a change of control, his options would be fully vested
and would remain outstanding for one year from the date of termination. Mr.
Turner's agreement also provides a severance benefit in the event his employment
is terminated by the Company without cause, or by Mr. Turner for good reason,
prior to a change in control. In the event of such a termination prior to a
change in control, he would be entitled to the following benefits: (a) salary
for eighteen months following the date of termination and (b) any stock options
would become fully vested and remain exercisable for one year.
As a result of the sale of the 1,822,500 8% Convertible Preference Shares
to HM4 Triton, L.P. in September 1998, a change in control was deemed to have
occurred for the purposes of Mr. Turner's agreement.
The Employment Agreements with Messrs. Dunlevy, Garrett, Gros-Dubois and
Maxted provide certain benefits only in the event of the termination of
employment following a change of control. If, following a change of control, the
officer's employment is terminated for a reason other than (a) his death,
disability or retirement, (b) for cause, or (c) his voluntary termination other
than for good reason, he would be entitled to receive a lump sum severance
payment equal to the sum of the following amounts: (i) two times the product of
(x) 115% times (y) the officer's annual base salary as of the date of
termination; (ii) the aggregate spread between the exercise prices of all stock
options held by the officer, whether or not then exercisable, and the highest
price per Ordinary Share actually paid in connection with any change in control;
(iii) certain relocation and indemnity payments; (iv) the present value of the
difference in retirement benefit to which he would have been entitled if he
would have accumulated three additional years of service after the date of
termination; and (v) in the event he is subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, as a result of
the change of control, an additional "gross-up" amount such that, after payment
of such excise tax, and any other taxes on such additional amount, he would be
entitled to a net amount equal to the amounts set forth in the agreement. For
the purposes of these employment agreements, "change in control" has the same
definition as that for the SERP, which is set forth in the discussion following
the Pension Plan Table above.
DIRECTORS' COMPENSATION
Stock and Cash Remuneration. Non-employee directors of the Company are
entitled to receive an annual cash stipend of $25,000 plus $1,000 (or, $2,000 in
the case of the committee chairmen) for each board or committee meeting
attended. Members of the Board of Directors are also reimbursed for travel
expenses to meetings of the Board of Directors and its committees. Pursuant to a
Company stock option plan, on the first trading day of January each year the
non-employee directors automatically receive nonqualified stock options to
purchase 15,000 Ordinary Shares. The stock options issuable pursuant to this
plan have an exercise price equal to the closing price of the Ordinary Shares on
the date of grant, are fully exercisable upon issuance, and terminate upon the
earlier to occur of the tenth anniversary of the date of grant or five years
following the termination of service as a director (other than for cause). In
accordance with the plan, in January 2000, each of Messrs. Erikson, Hudson,
Huff, McMahon, Norsworthy, Vermillion and Winters received nonqualified stock
options to purchase 15,000 Ordinary Shares, which had an exercise price of
$20.06. Prior to January 2000, each non-employee director was entitled to make
an election in January of each year to receive either (i) a restricted grant of
1,000 Ordinary Shares and stock options to purchase 10,000 Ordinary Shares or
(ii) stock options to purchase 15,000 Ordinary Shares. This election was
eliminated in January 2000. On August 6, 1999, certain non-employee directors
were granted stock options at an exercise price of $14.50 per share, which was
greater than the $10.75 closing price of the Company's Ordinary Shares on that
date. These options have a ten-year term and became 100% vested on January 1,
2000. Pursuant to this grant, the non-employee directors received options in the
following amounts: Mr. Erikson, 30,000 shares; Mr. Hudson, 45,000 shares; Mr.
Huff, 30,000 shares; Mr. McMahon, 37,500 shares; Mr. Norsworthy, 7,500 shares;
and Mr. Winters, 30,000 shares. In addition, in January 2000, the options
granted to the non-employee directors in January 1998 were amended to conform
their termination provisions to the five-year post-termination period contained
in the options granted to the non-employee directors since January 1999.
Pursuant to the Shareholders Agreement between HM4 Triton, L.P. and the
Company entered into at the time of HM4 Triton, L.P.'s initial investment in the
Company, Messrs. Hicks and Furst are not entitled to compensation as directors
of the Company.
Retirement Plan for Directors. The Company has a retirement plan for
non-employee directors. In order to be eligible, a director must have served as
an outside director for at least five years or, if a director has served less
than five years, (i) have had his service on the board as an outside director
terminated due to death or disability or (ii) have a change of control of the
Company occur while he was a director. The annual benefit under the retirement
plan is $25,000, payable quarterly and commencing at the beginning of the
Company's fiscal quarter next following the later of the date on which a
director (i) attains age 65 or (ii) retires from the Board of Directors. If a
director retires from the board due to his death or disability, the payments to
the director or his estate will commence at the beginning of the Company's next
fiscal quarter. The payment of benefits continue for a period equal to the
number of years, rounded upwards to the nearest six months, during which such
director served as an outside director, but not more than ten years. The Company
may elect in its discretion to pay a retired director, with the consent of such
director or his estate, a lump sum.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN
TRANSACTIONS
Transactions with HM4 Triton, L.P. and its Affiliates
In August 1998, the Company entered into a Shareholders Agreement with HM4
Triton, L.P. and a Financial Advisory Agreement (the "Financial Advisory
Agreement") and a Monitoring and Oversight Agreement (the "Monitoring
Agreement") with Hicks, Muse & Co. Partners, L.P. ("Hicks Muse Partners").
Messrs. Hicks and Furst are owners of the general partner of Hicks Muse
Partners.
The Shareholders Agreement provides that, subject to the following
paragraph, so long as the entire Board of Directors of the Company consists of
ten members, HM4 Triton, L.P. (and its designated transferees, collectively) may
designate four nominees for election to the Board and the Company is obligated
to cause HM4 Triton, L.P.'s designees to be nominated for election. Pursuant to
the Shareholders Agreement, HM4 Triton, L.P. has designated Mr. Hicks for
nomination for election at the Meeting. Messrs. Furst, Vermillion and Winters
were HM4 Triton, L.P.'s designees for nomination for election at the 1999 Annual
Meeting.
The right of HM4 Triton, L.P. (and its designated transferees) to designate
nominees for election to the Board will be reduced if the number of Ordinary
Shares (assuming conversion of any 8% Convertible Preference Shares into
Ordinary Shares) held by HM4 Triton, L.P. and its affiliates is reduced as set
forth below:
<TABLE>
<CAPTION>
Ownership of Ordinary Shares
(including 8% Convertible Preference
Number of directors
Shares on an as entitled to be designated
converted basis)(approx.) for nomination
------------------------------- -------------------------
<S> <C>
>14.8 million 4
-
<14.8 million, but >9.9 million 3
-
<9.9 million, but >4.9 million 2
-
<4.9 million, but >197,500 1
-
<197,500 0
</TABLE>
So long as HM4 Triton, L.P. is entitled to designate one nominee for
director, the Company is required to cause at least one HM4 Triton, L.P.
director to be a member of each committee of the Board.
In the Shareholders Agreement, the Company also agreed that, so long as HM4
Triton, L.P. and its affiliates continue to hold at least approximately 9.9
million Ordinary Shares (assuming conversion of any 8% Convertible Preference
Shares held by HM4 Triton, L.P. and its affiliates into Ordinary Shares), or
shares representing in the aggregate at least 10% of the outstanding Ordinary
Shares (assuming the conversion or exchange of all outstanding convertible or
exchangeable securities of the Company), the Company would not take certain
actions without the consent of HM4 Triton, L.P. Some of the actions that would
require HM4 Triton, L.P.'s consent are listed below:
- - amending the Company's Articles of Association or the terms of the 8%
Convertible Preference Shares with respect to the voting powers, rights or
preferences of the holders of 8% Convertible Preference Shares,
- - entering into a merger or similar business combination transaction, or
effecting a reorganization, recapitalization or other transaction pursuant to
which a majority of the outstanding ordinary shares or any 8% Convertible
Preference Shares are exchanged for securities, cash or other property,
- - authorizing, creating or modifying the terms of any securities that would
rank equal to or senior to the 8% Convertible Preference Shares,
- - selling assets comprising more than 50% of the market value of the Company,
- - paying dividends on the Company's ordinary shares or other shares ranking
junior to the 8% Convertible Preference Shares,
- - incurring certain levels of debt, and
- - commencing a tender offer or exchange offer for any of the Company's ordinary
shares.
In the Shareholders Agreement, the Company has granted to HM4 Triton, L.P.
and persons to whom it transfers its shares certain rights to require the
Company to file a registration statement with the Securities and Exchange
Commission to permit them to freely sell the 8% Convertible Preference Shares
and Ordinary Shares they then own (together, the "Registrable Shares"). The
Shareholders Agreement provides that one or more holders of Registrable Shares
may (subject to customary "black-out" periods) require the Company to effect up
to five registrations under the Securities Act of 1933 (the "Securities Act") if
the Registrable Shares proposed to be sold represent more than 20% of the then
outstanding Registrable Shares. The Shareholders Agreement also provides certain
"piggyback" registration rights to the holders of Registrable Shares whenever
the Company proposes to register an offering of any of its capital stock under
the Securities Act (including on behalf of any shareholder of the Company other
than a holder of Registrable Shares), subject to certain exceptions. In
addition, the Shareholders Agreement contains customary provisions regarding the
payment of holders' expenses relating to offerings by the Company in connection
with the exercise of registration rights and regarding indemnification of the
Company and the holders of Registrable Shares for certain securities law
violations.
The Financial Advisory Agreement designates Hicks Muse Partners as the
Company's exclusive financial advisor in connection with any Sale Transaction
(defined below) unless either the Chief Executive Officer of the Company elects
not to retain a financial advisor or Hicks Muse Partners and the Company agree
to retain an additional financial advisor in connection with any particular Sale
Transaction. The Financial Advisory Agreement requires the Company to pay a fee
to Hicks Muse Partners in connection with any Sale Transaction (unless the Chief
Executive Officer of the Company elects not to retain a financial advisor) in an
amount equal to the lesser of (i) the fees then charged by first-tier investment
banking firms for similar advisory services rendered in similar transactions or
(ii) 1.5% of the Transaction Value (as defined in the Financial Advisory
Agreement); provided that the fee will be divided equally between Hicks Muse
Partners and any additional financial advisor that the Company and Hicks Muse
Partners agree will be retained by the Company with respect to any such
transaction. A "Sale Transaction" is defined as any merger, sale of securities
representing a majority of the combined voting power of the Company, sale of
assets of the Company representing more than 50% of the total market value of
the assets of the Company and its subsidiaries or other similar transaction. The
Company is also required to reimburse Hicks Muse Partners for reasonable
disbursements and out-of-pocket expenses Hicks Muse Partners incurs in
connection with its advisory services.
Pursuant to the Monitoring Agreement, Hicks Muse Partners provides
financial oversight and monitoring services as requested by the Company and the
Company pays to Hicks Muse Partners an annual fee of $500,000, payable in
quarterly installments. In addition, the Company is obligated to reimburse Hicks
Muse Partners for reasonable disbursements and out-of-pocket expenses incurred
by Hicks Muse Partners or its affiliates for the account of the Company or in
connection with the performance of its services.
The Financial Advisory and Monitoring Agreements will remain in effect
until the earlier of (i) September 30, 2008 or (ii) the date on which HM4
Triton, L.P. and its affiliates cease to beneficially own at least 5% of the
Company's outstanding Ordinary Shares (determined after giving effect to the
conversion of all 8% Convertible Preference Shares held by HM4 Triton, L.P. and
its affiliates). The Company has agreed to indemnify Hicks Muse Partners with
respect to liabilities incurred as a result of Hicks Muse Partners' performance
of services for the Company pursuant to the Financial Advisory Agreement and the
Monitoring Agreement.
The Company is also required to provide directors' and officers' liability
insurance coverage for HM4 Triton, L.P. and its affiliates with respect to any
claims brought against them relating to any act or omission of any director of
the Company in his or her capacity as a director of the Company. The Company is
required to maintain this coverage for so long as HM4 Triton, L.P. is entitled
to nominate any members of the Board of Directors of the Company.
In April 1999, the Company sold to HMTF Operating L.P., an entity
affiliated with Hicks Muse and Messrs. Hicks and Furst, its interest in a
hunting facility in Texas and related facilities for $900,000 and recognized a
gain of $400,000. The purchase price was derived through negotiation between
representatives of the Company and Hicks Muse and was approved by the
disinterested members of the Company's Board of Directors.
Transactions with Cooper Cameron Corporation and Oceaneering International, Inc.
Both Cooper Cameron Corporation ("Cooper Cameron") and Oceaneering
International, Inc. ("Oceaneering") were winning bidders to provide services as
subcontractors in connection with the Company's offshore drilling program in
Equatorial Guinea. Cooper Cameron will provide certain subsea equipment and
related services and the Company expects that Cooper Cameron's contract will
amount to approximately $22 million during 2000 based on the planned drilling
program. Oceaneering also will provide certain subsea equipment and related
services and the Company expects that Oceaneering's contract will amount to
approximately $7 million during 2000 based on the planned drilling program. Mr.
Erikson is the Chairman, President and Chief Executive Officer of Cooper
Cameron, and Mr. Huff is the Chairman, President and Chief Executive Officer of
Oceaneering.
INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has approved the selection of
PricewaterhouseCoopers LLP as independent auditors to examine the Company's
accounts for the year ending December 31, 2000. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Meeting with the
opportunity to make a statement if they desire to do so and to be available to
respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange. Such persons are required
by Securities and Exchange Commission regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to the year ended December 31, 1999, or written representations from
certain reporting persons, the Company believes that all filing requirements
applicable to its directors, officers and persons who own more than 10% of a
registered class of the Company's equity securities have been complied with,
except that Mr. Hudson filed one report late regarding a gift of shares in 1998,
and Mr. Hicks filed two reports late regarding two purchases of a total of 300
shares.
SHAREHOLDER PROPOSALS
A shareholder who desires to present proposals to the Company's Annual
Meeting of Shareholders in 2001 and to have such proposals set forth in the
Company's proxy statement for that meeting must submit such proposals to the
Company no later than December 4, 2000. Any shareholder may submit any such
proposal to Triton Energy, Attention: Corporate Secretary, 6688 North Central
Expressway, Suite 1400, Dallas, Texas 75206. All shareholder proposals must
comply with Rule 14a-8 promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
Pursuant to the Company's Articles of Association, if a shareholder desires
to nominate persons for election as directors at an Annual Meeting, the
shareholder must deliver to the Secretary of the Company written notice no later
than 90 days in advance of such Annual Meeting. The notice must state (i) the
name and address, as it appears on the books of the Company, of the shareholder
who intends to make the nomination and of the person or persons to be nominated;
(ii) a representation that the shareholder is a record holder of shares of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified; (iii) the
number of Ordinary Shares beneficially owned by the shareholder; (iv) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (v) such other information regarding each nominee proposed by the
shareholder as would be required to be included in a proxy statement filed
pursuant to the Securities Exchange Act of 1934; and (vi) the consent of each
nominee to serve as a director of the Company, if so elected.
If a shareholder desires to present proposals to the Company's Annual
Meeting of Shareholders in 2001 but does not have the proposals included in the
Company's Proxy Statement for that meeting, and does not notify the Company of
the proposals by February 17, 2001, the persons named in the proxies solicited
by the Company in connection with the 2001 Annual Meeting will vote their
proxies in their discretion with respect to such proposals.
OTHER MATTERS
The Annual Report to Shareholders for the year ended December 31, 1999, is
enclosed. The Annual Report does not form a part of this Proxy Statement or the
materials for the solicitation of proxies to be voted at the Meeting.
A COPY OF THE ANNUAL REPORT ON FORM 10-K OF TRITON ENERGY LIMITED, AS
AMENDED, FOR THE PERIOD ENDED DECEMBER 31, 1999, INCLUDING FINANCIAL STATEMENTS
AND SCHEDULES BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT NO CHARGE TO EACH
PERSON TO WHOM A PROXY STATEMENT IS DELIVERED UPON RECEIPT OF A WRITTEN OR ORAL
REQUEST OF SUCH PERSON ADDRESSED TO TRITON ENERGY, ATTN: INVESTOR RELATIONS,
6688 NORTH CENTRAL EXPRESSWAY, SUITE 1400, DALLAS, TEXAS 75206 (TELEPHONE (214)
691-5200). THE COMPANY WILL ALSO FURNISH THE ANNUAL REPORT ON FORM 10-K TO ANY
"BENEFICIAL OWNER" OF SUCH SECURITIES AT NO CHARGE UPON RECEIPT OF A WRITTEN
REQUEST, ADDRESSED TO INVESTOR RELATIONS, AND CONTAINING A GOOD FAITH
REPRESENTATION THAT, AT THE RECORD DATE, SUCH PERSON WAS A BENEFICIAL OWNER OF
SECURITIES OF THE COMPANY ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000. COPIES OF ANY EXHIBIT TO THE FORM 10-K WILL BE
FURNISHED UPON THE PAYMENT OF A $.15 PER PAGE FEE.
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of preparing, printing and mailing the
proxy and the materials used in the solicitation will be borne by the Company.
The Company has retained Georgeson & Co., Inc. to aid in the solicitation
of proxies, for a fee of $10,000 and the reimbursement of out-of-pocket
expenses. Directors, officers and employees of the Company may also solicit
proxies, for no additional compensation from the Company. Arrangements also may
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Ordinary
Shares held by such persons, and the Company will reimburse them for their
reasonable expenses.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE ADDRESSED TO THE COMPANY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD
WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
TRITON ENERGY LIMITED
By Order of the Board of Directors
Thomas J. Murphy
Secretary
April 3, 2000
<PAGE>
TRITON ENERGY LIMITED
PROXY - ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints James C. Musselman, W. Greg Dunlevy, A.E.
Turner, III, and Thomas J. Murphy, each with power to act without the other and
with full power of substitution, as Proxies to represent and vote, as designated
on the reverse side, all shares of Triton Energy Limited owned by the
undersigned, at the Annual Meeting of Shareholders to be held at the Royal Oaks
Country Club, 7915 Greenville Avenue, Dallas, Texas 75231 on Tuesday, May 16,
2000, 10:00 a.m., local time, upon such business as may properly come before the
meeting or any adjournment including the following set forth on the reverse
side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED (I) FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR, AND (II)
AT THE DISCRETION OF THE PROXY HOLDERS WITH REGARD TO ANY OTHER MATTER THAT MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
(CONTINUED, AND TO BE SIGNED AND DATED, ON THE REVERSE SIDE)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK
YOUR VOTES AS X
---
IN THIS EXAMPLE
1. Election as Directors of the nominees listed below.
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the to vote for all
contrary below) Nominees
--- ---
Nominees: Sheldon R. Erikson, Thomas O. Hicks and John R. Huff
______________________________________________________
For all nominees except as noted above
2. In their discretion on any other matter that may properly come before the
meeting or any adjournment thereof.
Please date, sign exactly as shown hereon and mail promptly this proxy in the
enclosed envelope. When there is more than one owner, each should sign. When
signing as an attorney, administrator, executor, guardian or trustee, please add
your title as such. If executed by a corporation, the proxy should be signed by
a duly authorized officer. If executed by a partnership, please sign in the
partnership name as an authorized person.
Date:_______________________, 2000
_______________________________
(Signature)
Date:_______________________, 2000
_______________________________
(Signature)
THIS PROXY MAY BE REVOKED PRIOR TO THE EXERCISE OF THE POWERS CONFERRED BY THE
PROXY.
