<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1998 COMMISSION FILE NUMBER 0-5426
THE WISER OIL COMPANY
A DELAWARE CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 55-0522128
8115 PRESTON ROAD, SUITE 400
DALLAS, TEXAS 75225
TELEPHONE (214) 265-0080
Former name, former address and former fiscal year, if changed since last
report. NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
x
----- -----
Yes No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
Class Outstanding at June 30, 1998
----------- ----------------------------
$3 par value 8,951,965
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<PAGE>
THE WISER OIL COMPANY
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The consolidated condensed financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial
statements reflect all adjustments which are, in the opinion of management,
necessary to fairly present such information. Although the Company
believes that the disclosures are adequate to make the information
presented not misleading, certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and the notes thereto
included in the Company's latest annual report on Form 10-K.
2
<PAGE>
THE WISER OIL COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
---------- -------------
<S> <C> <C>
(000's) except share data
ASSETS
Current Assets:
Cash and cash equivalents.................................... $ 58 $ 13,255
Accounts receivable.......................................... 11,307 13,765
Inventories.................................................. 1,034 1,007
Income taxes receivable...................................... 3,055 725
Prepaid expenses............................................. 1,328 438
--------- ---------
Total current assets...................................... 16,782 29,190
--------- ---------
Property, Plant and Equipment, at cost:
Oil and gas properties (successful efforts method)........... 365,411 346,655
Other properties............................................. 5,545 5,399
--------- ---------
370,956 352,054
Accumulated depreciation, depletion and amortization......... (143,878) (131,346)
--------- ---------
Net property, plant and equipment............................ 227,078 220,708
Other Assets.................................................. 3,894 4,658
--------- ---------
$ 247,754 $ 254,556
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................................. $ 11,386 $ 18,396
Accrued liabilities.......................................... 2,954 2,985
--------- ---------
Total current liabilities.................................. 14,340 21,381
--------- ---------
Long Term Debt................................................ 134,341 124,304
Deferred Benefit Cost......................................... 1,248 1,169
Deferred Income Taxes......................................... 9,102 10,278
Stockholders' Equity:
Common stock - $3 par value; 20,000,000 shares authorized;
shares issued - 9,128,169; shares outstanding - 8,951,965... 27,385 27,385
Paid-in capital.............................................. 3,223 3,223
Retained earnings............................................ 59,862 68,630
Foreign currency translation................................. 982 915
Treasury stock; 176,204 shares, at cost...................... (2,729) (2,729)
--------- ---------
Total stockholders' equity................................. 88,723 97,424
--------- ---------
$ 247,754 $ 254,556
========= =========
</TABLE>
The notes to financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 are an integral part of
these financial statements.
3
<PAGE>
THE WISER OIL COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
--------------------- -------------------
ENDED JUNE 30, ENDED JUNE 30,
--------------------- -------------------
1998 1997 1998 1997
--------- -------- -------- -------
(000's except per share data)
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales......................... $15,471 $16,207 $ 32,545 $39,269
Dividends and interest.................... 67 337 212 457
Marketable security sales................. - - - 1,813
Other..................................... 481 1,282 677 1,860
------- ------- -------- -------
16,019 17,826 33,434 43,399
------- ------- -------- -------
Costs and Expenses:
Production and operating.................. 6,273 6,760 12,435 13,561
Purchased natural gas..................... 350 261 738 773
Depreciation, depletion and amortization.. 6,821 5,243 13,662 11,010
Exploration............................... 3,654 3,517 7,007 4,139
General and administrative................ 2,553 2,553 4,979 4,931
Interest expense.......................... 3,227 2,091 6,373 3,355
------- ------- -------- -------
22,878 20,425 45,194 37,769
------- ------- -------- -------
Earnings (Loss) Before Income Taxes......... (6,859) (2,599) (11,760) 5,630
Income Tax Expense (Benefit)................ (2,184) (655) (3,529) 1,433
------- ------- -------- -------
NET INCOME (LOSS)........................... (4,675) (1,944) (8,231) 4,197
Retained Earnings, beginning of period...... 64,806 72,258 68,630 66,385
Dividends Paid.............................. (269) (269) (537) (537)
------- ------- -------- -------
Retained Earnings, end of period............ $59,862 $70,045 $ 59,862 $70,045
======= ======= ======== =======
Weighted Average Outstanding Shares......... 8,952 8,950 8,952 8,950
======= ======= ======== =======
Earnings (Loss) Per Share:
Basic..................................... ($0.52) ($0.22) ($0.92) $ 0.47
======= ======= ======== =======
Diluted................................... ($0.52) ($0.22) ($0.92) $ 0.47
======= ======= ======== =======
Cash Dividends Per Share.................... $0.03 $0.03 $0.06 $ 0.06
======= ======= ======== =======
</TABLE>
The notes to financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 are an integral part of
these financial statements.
4
<PAGE>
THE WISER OIL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
--------------------
ENDED JUNE 30,
--------------------
1998 1997
--------- ---------
(000's)
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss)............................................. $ (8,231) $ 4,197
Adjustments to reconcile net income to operating cash flows:
Depreciation, depletion and amortization.................... 13,662 11,010
Deferred income taxes....................................... (1,176) 449
Marketable securities and property sale gains............... (391) (3,595)
Foreign currency translation................................ 67 (11)
Exploration expense......................................... 7,007 4,139
Amortization of other assets................................ 292 -
Other Changes:
Accounts receivable....................................... 2,458 3,510
Inventories............................................... (27) (467)
Income taxes receivable................................... (2,331) 518
Prepaid expenses.......................................... (890) (55)
Other assets.............................................. 509 -
Accounts payable.......................................... (7,010) (3,828)
Accrued liabilities....................................... (31) 1,145
Deferred benefits cost.................................... 79 35
-------- --------
Operating Cash Flows................................... 3,987 17,047
-------- --------
Cash Flows From Investing Activities:
Capital and exploration expenditures.......................... (28,700) (40,762)
Proceeds from sales of property, plant and equipment.......... 2,053 2,945
Proceeds from marketable securities sales..................... - 1,929
-------- --------
Investing Cash Flows................................... (26,647) (35,888)
-------- --------
Cash Flows From Financing Activities:
Long term debt issued......................................... 10,000 125,000
Payments on long term debt.................................... - (78,654)
Debt issuance costs and fees.................................. - (4,890)
Common stock issued........................................... - 162
Dividends paid................................................ (537) (537)
-------- --------
Investing Cash Flows................................... 9,463 41,081
-------- --------
Net Increase In Cash............................................. (13,197) 22,240
Cash and Cash Equivalents, beginning of period................... 13,255 5,870
-------- --------
Cash and Cash Equivalents, end of period......................... $ 58 $ 28,110
======== ========
</TABLE>
The notes to financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 are an integral part of these
financial statements.
5
<PAGE>
THE WISER OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
COMPARISON OF QUARTERS ENDED JUNE 30, 1998 AND JUNE 30, 1997
Revenues for the second quarter of 1998 decreased $1.8 million or 10% from
the second quarter of 1997, due primarily to lower oil prices. Oil sales for the
second quarter of 1998 were $2.6 million lower than the second quarter of 1997
as the average price received for oil sales in the second quarter of 1998 was
$12.33 per barrel, down $4.99 per barrel or 29% from the second quarter of 1997.
Net oil production for the second quarter of 1998 was 592,000 barrels, up 3%
from 574,000 barrels in the second quarter of 1997 due primarily to increased
production from the Provost and Evi fields in Canada. Gas sales for the second
quarter of 1998 were $2.3 million higher than the second quarter of 1997 as the
average price received for gas sales was $1.96 per mcf, an increase of $0.19 per
mcf or 11% from the second quarter of 1997. Net gas production for the second
quarter of 1998 was 3,768 MMCF, up 875 MMCF or 30% from the second quarter of
1997 due primarily to production from the Welder Ranch field in South Texas
which was acquired in June 1997. During the second quarter of 1998, there were
no adjustments to oil and gas sales from the Company's hedging activities
compared to a reduction of $0.4 million in oil and gas sales in the second
quarter of 1997. The Company liquidated its remaining portfolio of marketable
securities during 1997. Accordingly, there were no sales of marketable
securities in the second quarter of 1998, and there were no sales of marketable
securities in the second quarter of 1997.
Production and operating expense for the second quarter of 1998 decreased
$0.5 million or 7% primarily as a result of cost cutting measures implemented at
the Maljamar and Wellman fields. On a BOE basis (excluding 140 MMCF and 133
MMCF of gas purchased for resale during the second quarter of 1998 and 1997,
respectively), production and operating expense during the second quarter of
1998 decreased to $4.89 per BOE or 19% from $6.01 per BOE during the second
quarter of 1997. Depreciation, depletion and amortization, ("DD&A") for the
second quarter of 1998, increased $1.6 million or 30% over the second quarter of
1997 due primarily to higher DD&A from the Maljamar field in New Mexico.
Exploration expense for the second quarter of 1998 was $3.7 million, up $0.2
million from the second quarter of 1997. General and administrative expense in
the second quarter of 1998 was comparable with the second quarter of 1997.
Interest expense during the second quarter of 1998 was $3.2 million or 54%
higher than the second quarter of 1997 due to the increase in long term debt
associated with the issuance of $125 million of Senior Subordinated Notes in May
1997 and $10 million of borrowings under the Credit Agreement in the second
quarter of 1998. The effective income tax rate during the second quarter of 1998
was 32% compared to 25% in the second quarter of 1997.
The Company realized a net loss of $4.7 million and net loss per share of
$0.52 in the second quarter of 1998 compared to a net loss of $1.9 million and
net loss per share of $0.22 during the second quarter of 1997. The Company's
Canadian operations incurred a pre-tax loss of $0.8 million during the second
quarter of 1998 compared to a pre-tax loss of $2.0 million during the second
quarter of 1997.
6
<PAGE>
THE WISER OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997
Revenues for the first half of 1998 decreased $10.0 million or 23% from the
first half of 1997, due primarily to lower oil prices. Oil sales for the first
half of 1998 were $6.5 million lower than the first half of 1997 as the average
price received for oil sales in the first half of 1998 was $13.27 per barrel,
down $5.30 per barrel or 29% from the first half of 1997. Net oil production
for the first half of 1998 was 1,275,000 barrels, up 1% from 1,260,000 barrels
in the first half of 1997 due primarily to increased production from the Provost
and Evi fields in Canada. Gas sales for the first half of 1998 were $0.6 million
higher than the first half of 1997 as net gas production for the first half of
1998 was 7,198 MMCF, up 1,135 MMCF or 19% from the first half of 1997 due
primarily to production from the Welder Ranch field in South Texas which was
acquired in June 1997. The average price received for gas sales during the
first half of 1998 was $1.96 per mcf, a decrease of $0.26 per mcf or 12% from
the first half of 1997. During the first half of 1998, there were no adjustments
to oil and gas sales from the Company's hedging activities compared to a
reduction of $1.8 million in oil and gas sales in the first half of 1997. The
Company liquidated its remaining portfolio of marketable securities during 1997.
Accordingly, there were no sales of marketable securities in the first half of
1998 compared to $1.8 million in gain from sales of marketable securities in the
first half of 1997.
Production and operating expense for the first half of 1998 decreased $1.1
million or 8% from the first half of 1997 primarily as a result of cost cutting
measures implemented at the Maljamar and Wellman fields and the sale of
properties in Michigan in the first quarter of 1997. On a BOE basis (excluding
305 MMCF and 301 MMCF of gas purchased for resale during the first half of 1998
and 1997, respectively), production and operating expense during the first half
of 1998 decreased to $4.81 per BOE or 15% from $5.66 per BOE during the first
half of 1997. DD&A for the first half of 1998, increased $2.7 million or 24%
over the first half of 1997 due primarily to higher DD&A from the Maljamar field
in New Mexico and from the South Texas properties acquired in June 1997.
Exploration expense for the first half of 1998 was $7.0 million, up $2.9 million
from the first half of 1997 due primarily to higher seismic expense in the U.S.
General and administrative expense in the first half of 1998 was comparable with
the first half of 1997. Interest expense during the first half of 1998 was $6.4
million which was $3.0 million or 90% higher than the first half of 1997 due to
the increase in long term debt associated with the issuance of $125 million of
Senior Subordinated Notes in May 1997 and $10 million of borrowings under the
Credit Agreement in the first half of 1998. The effective income tax rate during
the first half of 1998 was 30% compared to 25% in the first half of 1997.
The Company realized a net loss of $8.2 million and net loss per share of
$0.92 in the first half of 1998 compared to net income of $4.2 million and
earnings per share of $0.47 during the first half of 1997. The Company's
Canadian operations incurred a pre-tax loss of $1.5 million during the first
half of 1998 compared to a pre-tax loss of $2.9 million during the first half of
1997.
7
<PAGE>
THE WISER OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997 (CONTINUED)
Operating cash flows during the first half of 1998 were $4.0 million, down
$13.1 million from the first half of 1997 primarily as a result of decreased oil
sales combined with higher interest expense and a reduction in accounts payable.
Capital and exploration expenditures during the first half of 1998 were $28.7
million, down $12.1 million from $40.8 million during the first half of 1997.
YEAR 2000 ISSUE
The Company has assessed and continues to assess the impact of the "year 2000"
issue on its reporting systems and operations. The "year 2000" issue exists
because many computer systems and applications currently use two-digit date
fields to designate a year. As the century date occurs, two-digit date systems
will recognize the year 2000 as 1900 or not at all. This inability to recognize
the year 2000 may cause systems to process critical financial and operational
information incorrectly. The Company anticipates that all its significant
computer systems and software will be year 2000 compliant during 1998.
Management does not estimate future expenditures related to the year 2000
exposure to be material.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 "Reporting Comprehensive Income"("SFAS 130") which
establishes standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. Comprehensive
income includes net income and other comprehensive income, which includes, but
is not limited to, unrealized gains for marketable securities and future
contracts, foreign currency translation adjustments and minimum pension
liability adjustments. The impact of adopting SFAS No. 130 on the six months
ended June 30, 1998 and June 30, 1997 is as follows:
<TABLE>
<CAPTION>
JUNE 30,
-------------------
1998 1997
--------- --------
<S> <C> <C>
Net Income (Loss)............................... $(8,231) $4,197
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments...... 67 (11)
Unrealized gains on marketable securities..... - (600)
------- ------
Comprehensive income (loss)..................... $(8,164) $3,586
======= ======
</TABLE>
8
<PAGE>
NOTE 2. SUMMARY OF GUARANTIES OF 9 1/2% SENIOR SUBORDINATED NOTES
In May 1997, the Company issued $125 million aggregate principal amount of
its 9 1/2% Senior Subordinated Notes due 2007 pursuant to an offering exempt
from registration under the Securities Act of 1933. The notes are unsecured
obligations of the Company, subordinated in right of payment to all existing and
any future senior indebtedness of the Company. The notes rank pari passu with
any future senior subordinated indebtedness and senior to any future junior
subordinated indebtedness of the Company. The notes are fully and
unconditionally guaranteed, jointly and severally, on an unsecured, senior
subordinated basis by certain wholly owned subsidiaries of the Company (the
"Subsidiary Guarantors"). At the time of the initial issuance of the notes,
Wiser Oil Delaware, Inc., The Wiser Marketing Company, Wiser Delaware LLC,
T.W.O.C., Inc. and The Wiser Oil Company of Canada were the Subsidiary
Guarantors (the "Initial Subsidiary Guarantors"). Except for two wholly owned
subidiaries that are inconsequential to the Company on a consolidated basis, the
Initial Subsidiary Guarantors comprise all of the Company's direct and indirect
subsidiaries.
Sections 13 and 15(d) of the Securities Exchange Act of 1934 require
presentation of the following unaudited summarized financial information of the
Subsidiary Guarantors. The Company has not presented separate financial
statements and other disclosures concerning each Subsidiary Guarantor because
such information is not material to investors. There are no significant
contractual restrictions on distributions from each of the Subsidiary Guarantors
to the Company.
9
<PAGE>
THE WISER OIL COMPANY
SUBSIDIARY GUARANTORS
------------------------------
<TABLE>
<CAPTION>
THE WISER
WISER T.W.O.C. MARKETING COMBINED
CANADA(1) INC. COMPANY TOTAL
----------- --------- --------- --------
<S> <C> <C> <C> <C>
(000's)
REVENUES
- --------
FOR THE QUARTER ENDED JUNE 30,1998..... $ 3,778 $ - $ 540 $ 4,318
For the quarter ended June 30, 1997.... 3,320 48 410 3,778
FOR THE SIX MONTHS ENDED JUNE 30,1998.. 7,558 1 1,100 8,659
For the six months ended June 30,1997.. 7,401 1,908 1,087 10,396
INCOME (LOSS) BEFORE INCOME TAXES
- ---------------------------------
FOR THE QUARTER ENDED JUNE 30,1998..... $ (777) $ (4) $ 90 $ (691)
For the quarter ended June 30, 1997.... (2,013) 44 48 (1,921)
FOR THE SIX MONTHS ENDED JUNE 30,1998.. (1,486) (8) 156 (1,338)
For the six months ended June 30,1997.. (2,920) 1,900 116 (904)
NET INCOME (LOSS)
- ----------------
FOR THE QUARTER ENDED JUNE 30,1998..... $ (522) $ (3) $ 63 $ (462)
For the quarter ended June 30, 1997.... (1,510) 33 36 (1,441)
FOR THE SIX MONTHS ENDED JUNE 30,1998.. (1,040) (6) 109 (937)
For the six months ended June 30,1997.. (2,190) 1,409 86 (695)
CURRENT ASSETS
- --------------
JUNE 30,1998........................... $ 2,921 $ 36 $ 141 $ 3,098
December 31, 1997...................... 4,808 44 165 5,017
TOTAL ASSETS
- ------------
JUNE 30,1998........................... $54,305 $ 36 $ 561 $54,902
December 31, 1997...................... 52,083 44 492 52,619
CURRENT LIABILITIES
- -------------------
JUNE 30,1998........................... $ 5,711 $ - $ 283 $ 5,994
December 31, 1997...................... 6,646 - 250 6,896
NONCURRENT LIABILITIES
- ----------------------
JUNE 30,1998........................... $ - $ - $ - $ -
December 31, 1997...................... 9,474 - - 9,474
STOCKHOLDER'S EQUITY
- --------------------
JUNE 30,1998........................... $48,594 $ 36 $ 278 $48,908
December 31, 1997...................... 35,963 44 242 36,249
</TABLE>
(1) Includes the accounts of Wiser Oil Delaware, Inc., Wiser Delaware LLC and
The Wiser Oil Company of Canada.
See other notes to financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997.
10
<PAGE>
THE WISER OIL COMPANY
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders of The Wiser Oil Company was held
in Dallas, Texas, at 4:00 p.m., local time, on May 18, 1998.
(b) Proxies were solicited by the Board of Directors of The Wiser Oil
Company pursuant to Regulation 14A under the Securities Exchange Act
of 1934. There was no solicitation in opposition to the Board of
Directors' nominees as listed in the proxy statement and all of such
nominees were duly elected.
(c) Out of a total of 8,951,965 shares of The Wiser Oil Company common
stock outstanding and entitled to vote as of the March 27, 1998 record
date, 7,783,771 shares were present in person or by proxy,
representing approximately 87 percent of outstanding shares. The only
matter voted on by the stockholders, as fully described in the proxy
statement for the annual meeting, was the election of Jon L. Mosle,
Jr. and A.W. Schenck, III to serve three-year terms on the Board of
Directors of The Wiser Oil Company. The results of voting were as
follows:
Nominee Number of Shares Number of Shares
for Re-election Voting FOR Election WITHHOLDING AUTHORITY
as Director as Director to Vote for Election as Director
--------------- ------------------- --------------------------------
Jon L. Mosle, Jr. 6,827,914 955,857
A.W. Schenck, III 6,825,697 958,074
The following individuals continued their respective terms of service
as Directors of The Wiser Oil Company following the meeting:
John W. Cushing, III
Howard G. Hamilton
G. Frayer Kimball, III
Lorne H. Larson
Paul I. Neuenschwander
Andrew J. Shoup, Jr.
11
<PAGE>
THE WISER OIL COMPANY
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
The information required by this Item 6 (a) is set forth in the Index
to Exhibits accompanying this quarterly report and is incorporated
herein by reference.
(b) Reports on Form 8-K
-------------------
None.
12
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE WISER OIL COMPANY
-----------------------------------
(Registrant)
Date: August 12, 1998 /s/ Andrew J. Shoup, Jr.
-----------------------------
Andrew J. Shoup, Jr.
President and
Chief Executive Officer
Date: August 12, 1998 /s/ Lawrence J. Finn
-----------------------------
Lawrence J. Finn
Vice President, Finance and
Chief Financial Officer
13
<PAGE>
THE WISER OIL COMPANY
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
10.13* Retirement Restoration Plan
27 Financial Data Schedule
* Filed herewith.
14
<PAGE>
Exhibit 10.13
THE WISER OIL COMPANY
RETIREMENT RESTORATION PLAN
---------------------------
THIS RETIREMENT RESTORATION PLAN, made and executed at Dallas, Texas, by
THE WISER OIL COMPANY, a Delaware corporation (the "Company"),
WITNESSETH THAT:
WHEREAS, the Company has heretofore established for the benefit of its
employees a qualified defined benefit pension plan known as the Retirement
Income Plan for Employees of The Wiser Oil Company (the "Retirement Plan"); and
WHEREAS, the Company now desires to establish an unfunded nonqualified
retirement plan to supplement the benefits payable under the Retirement Plan to
certain key employees of the Company whose benefits otherwise payable under the
Retirement Plan have been reduced because of the maximum compensation and
maximum benefit limitations imposed under the Retirement Plan in order to comply
with the requirements of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises the Company hereby
establishes a supplemental retirement plan to provide benefits and be
administered in accordance with the following:
Section 1. Definitions. Unless the context clearly indicates otherwise,
-----------
when used in this Plan:
(a) "Change in Control" means any of the following events: (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended [the "Exchange Act"]), other
than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; or (ii)
during any period of two (2) consecutive years (not including any period
prior to the execution of this Plan), individuals who at the beginning of
such period constitute the Board of Directors of the Company and any new
director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clauses
(i) or (iii) of this paragraph) whose election by the Board of Directors of
the Company or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease
<PAGE>
for any reason to constitute a majority of the Board of Directors of the
Company; or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee designated pursuant to Plan
Section 3 to administer this Plan.
(d) "Company" means The Wiser Oil Company, a Delaware corporation.
(e) "Employer" includes the Company and any other incorporated or
unincorporated organization which may adopt both the Retirement Plan and
this Plan.
(f) "Participant" means the Chief Executive Officer of the Company and
any other employee of an Employer (i) who is a participant in the
Retirement Plan, (ii) whose annual base salary from an Employer is at least
$150,000, and (iii) who has been designated by the Chief Executive Officer
of the Company as a Participant for the purposes of this Plan.
(g) "Plan" means The Wiser Oil Company Retirement Restoration Plan as
in effect from time to time.
(h) "Retirement Plan" means the Retirement Income Plan for Employees
of The Wiser Oil Company as in effect from time to time.
Section 2. Nature of Plan. This Plan is an unfunded plan maintained
--------------
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees and does not qualify under the
provisions of Section 401 of the Code.
Section 3. Plan Administration. This Plan shall be administered by the
-------------------
Committee appointed to administer the Retirement Plan. The Committee shall have
discretionary and final authority to interpret and implement the provisions of
the Plan, including without limitation, authority to determine
-2-
<PAGE>
eligibility for benefits under the Plan. The Committee shall act by a majority
of its members at the time in office and such action may be taken either by a
vote at a meeting or in writing without a meeting. The Committee may adopt such
rules and procedures for the administration of the Plan as are consistent with
the terms hereof and shall keep adequate records of its proceedings and acts.
Every interpretation, choice, determination or other exercise by the Committee
of any power or discretion given either expressly or by implication to it shall
be conclusive and binding upon all parties having or claiming to have an
interest under the Plan or otherwise directly or indirectly affected by such
action, without restriction, however, on the right of the Committee to
reconsider and redetermine such action. The Employers shall indemnify and hold
harmless each member of the Committee and each director, officer and employee of
an Employer against any claim, cost, expense (including attorneys' fees),
judgment or liability (including any sum paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to act as a member
of the Committee or any other act or omission to act relating to this Plan,
except in the case of such person's fraud or willful misconduct.
Section 4. Amount of Benefits. If a Participant or beneficiary of a
------------------
Participant receives or commences receiving benefits under the Retirement Plan,
then such Participant or beneficiary shall be entitled to receive benefits under
this Plan which are actuarially equivalent to the excess, if any, of:
(a) the value of the benefits which would have been payable to such
Participant or beneficiary under the Retirement Plan if the provisions of
the Retirement Plan were administered without regard to (i) the maximum
amount of compensation limitation imposed under the Retirement Plan in
order to comply with Section 401(a)(17) of the Code, and (ii) the maximum
amount of retirement income limitation imposed under the Retirement Plan in
order to comply with Section 415 of the Code, over
(b) the value of the benefits which are actually payable to such
Participant or beneficiary under the provisions of the Retirement Plan.
For purposes of this Plan, the value of benefits and the amounts payable under
alternate forms of benefits shall be determined using the actuarial assumptions
being used under the Retirement Plan for such purposes.
Section 5. Payment of Benefits. The benefits payable to a Participant or
-------------------
beneficiary of a Participant under this Plan shall be paid or commence being
paid, as the case may be, concurrently with the payment or the commencement of
the payment of benefits to such Participant or beneficiary under the Retirement
Plan, and
-3-
<PAGE>
shall be paid to such Participant or beneficiary in such form available under
the Retirement Plan as shall be selected by the Committee in its absolute
discretion; provided, however, that any provision of this Plan to the contrary
notwithstanding, if a Participant's employment with an Employer terminates
within two (2) years following a Change of Control for any reason other than
such Participant's (i) death, (ii) retirement under the normal, late, early or
disability retirement provisions of the Retirement Plan, or (iii) transfer to
employment with another Employer, then in lieu of and in full satisfaction of
all future benefits otherwise payable under this Plan to or with respect to such
Participant or a beneficiary of such Participant, the actuarial equivalent of
the value of the benefits accrued under this Plan with respect to such
Participant or beneficiary as of the date of such termination of employment
shall be paid to such Participant in a single lump sum in cash within sixty (60)
days following such termination of employment.
Section 6. Source of Benefits. All benefits payable under this Plan to or
------------------
with respect to a Participant who was an employee of an Employer shall be paid
from the general assets of such Employer. If the benefits payable to or with
respect to a Participant under this Plan are attributable to periods of
employment with more than one Employer, the amount payable to or with respect to
such Participant shall be apportioned among and paid by the Employers who
employed such Participant in such proportions as shall be determined by the
Committee in its absolute discretion. No provision of this Plan shall be deemed
or construed to create a trust fund of any kind or to grant to any Participant
or beneficiary of a Participant any property right or beneficial ownership
interest of any kind in the assets of an Employer. To the extent that any
Participant or beneficiary of a Participant acquires a right to receive payments
from an Employer pursuant to this Plan, such right shall be no greater than the
right of any unsecured general creditor of such Employer.
Section 7. Amendment and Termination. The Board of Directors of the
-------------------------
Company shall have the right and power at any time and from time to time to
amend this Plan, in whole or in part, on behalf of all Employers, and at any
time to terminate this Plan or any Employer's participation hereunder. Any
amendment to or termination of this Plan shall be made by or pursuant to a
resolution duly adopted by the Board of Directors of the Company, and shall be
evidenced by such resolution or by a written instrument executed by such person
as the Board of Directors of the Company shall authorize for such purpose. Any
provision of this Plan to the contrary notwithstanding, no amendment to or
termination of this Plan shall reduce or eliminate an Employer's obligation for
the payment of benefits accrued under this Plan as of the date of such amendment
or termination, such benefits to be determined as if the Retirement Plan had
terminated on such date.
-4-
<PAGE>
Section 9. Spendthrift Provision. No right or interest under this Plan of
---------------------
a Participant or beneficiary of a Participant may be assigned, transferred or
alienated, in whole or in part, either directly or by operation of law, and no
such right or interest shall be liable for or subject to any debt, obligation or
liability of such Participant or beneficiary.
Section 10. Employment Noncontractual. The establishment of this Plan
-------------------------
shall not enlarge or otherwise affect the terms of any Participant's employment
with an Employer, and such Employer may terminate the employment of such
Participant as freely and with the same effect as if this Plan had not been
established.
Section 11. Adoption by Other Employers. With the consent of the Chief
---------------------------
Executive Officer of the Company, this Plan may be adopted by any Employer
participating in the Retirement Plan, such adoption to be effective as of the
date specified by such Employer at the time of adoption.
Section 12. Claims Procedure. If any person (hereinafter called the
----------------
"Claimant") feels that he or she is being denied a benefit to which he or she is
entitled under this Plan, such Claimant may file a written claim for said
benefit with the Committee. Within sixty days following the receipt of such
claim the Committee shall determine and notify the Claimant as to whether he or
she is entitled to such benefit. Such notification shall be in writing and, if
denying the claim for benefit, shall set forth the specific reason or reasons
for the denial, make specific reference to the pertinent provisions of this
Plan, and advise the Claimant that he or she may, within sixty days following
the receipt of such notice, in writing request to appear before the Committee or
its designated representative for a hearing to review such denial. Any such
hearing shall be scheduled at the mutual convenience of the Committee or its
designated representative and the Claimant, and at any such hearing the Claimant
and/or his or her duly authorized representative may examine any relevant
documents and present evidence and arguments to support the granting of the
benefit being claimed. The final decision of the Committee with respect to the
claim being reviewed shall be made within sixty days following the hearing
thereon, and Committee shall in writing notify the Claimant of said final
decision, again specifying the reasons therefor and the pertinent provisions of
this Plan upon which said final decision is based. The final decision of the
Committee shall be conclusive and binding upon all parties having or claiming to
have an interest in the matter being reviewed.
Section 13. Applicable Law. This Plan shall be governed and construed in
--------------
accordance with the internal laws (and not the principles relating to conflicts
of laws) of the State of Texas, except where superseded by federal law.
-5-
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed on this _____ day of
____________________, 1995.
THE WISER OIL COMPANY
By
-------------------------------------
Title:
-6-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q,
JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-01-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 58 58
<SECURITIES> 0 0
<RECEIVABLES> 11,307 11,307
<ALLOWANCES> 0 0
<INVENTORY> 1,034 1,034
<CURRENT-ASSETS> 16,782 16,782
<PP&E> 370,956 370,956
<DEPRECIATION> 143,878 143,878
<TOTAL-ASSETS> 247,754 247,754
<CURRENT-LIABILITIES> 14,340 14,340
<BONDS> 134,341 134,341
0 0
0 0
<COMMON> 27,385 27,385
<OTHER-SE> 61,338 61,338
<TOTAL-LIABILITY-AND-EQUITY> 247,754 247,754
<SALES> 15,471 32,545
<TOTAL-REVENUES> 16,019 33,434
<CGS> 6,623 13,173
<TOTAL-COSTS> 19,651 38,821
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,227 6,373
<INCOME-PRETAX> (6,859) (11,760)
<INCOME-TAX> (2,184) (3,529)
<INCOME-CONTINUING> (4,675) (8,231)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,675) (8,231)
<EPS-PRIMARY> (.52) (.92)
<EPS-DILUTED> (.52) (.92)
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