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
THE ADAMS EXPRESS COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) 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:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PETROLEUM & RESOURCES CORPORATION
Seven St. Paul Street
Baltimore, Maryland 21202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 25, 1997
Notice is hereby given that the annual meeting of stockholders of PETROLEUM
& RESOURCES CORPORATION, a Maryland corporation (the "Corporation"), will be
held at the Hotel Nikko, (Ballroom III), 222 Mason Street, San Francisco,
California, on Tuesday, March 25, 1997 at 11:00 a.m., for the following
purposes:
(a) to elect directors as identified in the Proxy Statement for the ensuing
year;
(b) to consider and vote upon the ratification of the selection of Coopers
& Lybrand L.L.P. as the firm of independent accountants to audit the books and
accounts of the Corporation for or during the year ending December 31, 1997; and
(c) to transact such other business as may properly come before said
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on February 11,
1997, as the record date for the determination of the stockholders entitled to
notice of and to vote at the meeting.
By order of the Board of Directors,
J. G. WHITNEY
VICE PRESIDENT AND SECRETARY
Baltimore, Maryland 21202
February 12, 1997
NOTE: STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO
FILL IN, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE
WITHOUT DELAY.
<PAGE>
PETROLEUM & RESOURCES CORPORATION
Seven St. Paul Street
Baltimore, MD 21202
PROXY STATEMENT
February 12, 1997
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Petroleum & Resources Corporation, a
Maryland corporation (the "Corporation"), for the annual meeting of stockholders
to be held on Tuesday, March 25, 1997 and is first being sent to stockholders on
or about February 12, 1997.
Only stockholders of record at the close of business on February 11, 1997
are entitled to vote at the annual meeting to be held on March 25, 1997. On the
record date the Corporation had outstanding 13,065,819 shares of Common Stock
("Common Stock").
The holders of the Common Stock shall be entitled to one vote per share.
The Corporation has no other class of security outstanding. Directors shall be
elected by a plurality of the votes cast at the meeting. Proposal (b) referred
to below requires the affirmative vote of a majority of the votes cast at the
meeting. Unless otherwise required by the Corporation's Articles of
Incorporation or By-laws, or by applicable Maryland law, any other matter
properly presented for a vote at the meeting will require the affirmative vote
of a majority of the votes cast at the meeting. Shares of Common Stock
represented by proxies which are marked "withhold authority" (with respect to
the election of any nominee for election as director) or marked abstain or which
constitute a broker non-vote will be counted as present at the meeting for
determining a quorum. (Broker non-votes occur when a nominee holding shares for
a beneficial owner has not received voting instructions from the beneficial
owner and such nominee does not possess or choose to exercise discretionary
authority with respect thereto.) With respect to any matter to be decided by a
plurality or majority of the votes cast at the meeting, proxies marked "withhold
authority" (with respect to the election of any nominee for election as
director) or marked abstain or which constitute a broker non-vote will not be
counted for the purpose of determining the number of votes cast at the meeting,
and therefore will have no effect on any such vote.
The purposes for which the annual meeting to be held on March 25, 1997 is
being called are: (a) the election of directors of the Corporation; (b) the
ratification of the selection of Coopers & Lybrand L.L.P. as the firm of
independent accountants to audit the books and accounts of the Corporation for
or during the year ending December 31, 1997; and (c) the transaction of such
other business as may properly come before said meeting or any adjournment
thereof. At the date of this proxy statement the only business which the
management intends to present, or knows that others will present at the meeting,
are Proposals (a) and (b) referred to above. Should any other matter come before
the meeting, however, action may be taken thereon pursuant to proxies in the
form enclosed.
Except for Proposals (a) and (b) referred to above, the proxies confer
discretionary authority on the persons named therein or their substitutes with
respect to any business which may properly come before the meeting. Any
stockholder executing and returning a proxy in the enclosed form has the power
to revoke such proxy at any time prior to the voting thereof by written notice
to the Corporation, by executing a later dated proxy or by appearing and voting
at the meeting. Properly executed proxies
1
<PAGE>
will be voted as directed but if no direction is specified the shares covered by
a given proxy will be voted in favor of Proposals (a) and (b).
The Corporation will pay all costs of soliciting proxies in the
accompanying form. See "Other Matters" below. Solicitation will be made by mail,
and officers and regular employees of the Corporation may also solicit proxies
by telephone or personal interview. The Corporation expects to request brokers
and nominees who hold stock in their names to furnish this proxy material to
their customers and to solicit proxies from them, and will reimburse such
brokers and nominees for their out-of-pocket and reasonable clerical expenses in
connection therewith.
(a) ELECTION OF DIRECTORS
Unless contrary instructions are given by the stockholder signing a proxy,
it is intended that each proxy in the accompanying form will be voted at the
Annual Meeting for the election to the Board of Directors for the ensuing year
of the following nominees, all of whom have consented to serve if elected:
Enrique R. Arzac Thomas H. Lenagh Douglas G. Ober
Leigh Carter W. D. MacCallan Landon Peters
Allan Comrie Augustine R. Marusi John J. Roberts
Daniel E. Emerson W. Perry Neff Robert J. M. Wilson
If for any reason one or more of the nominees above named shall become
unable or unwilling to serve (which is not now expected) when the election
occurs, proxies in the accompanying form will, in the absence of contrary
instructions, be voted for the election of the other nominees above named and
may be voted for substitute nominees in the discretion of the persons named as
proxies in the accompanying form. The directors elected will serve until the
next annual meeting or until their successors are elected, except as otherwise
provided in the By-laws of the Corporation.
INFORMATION AS TO NOMINEES FOR ELECTION AS DIRECTORS (AS OF DECEMBER 31, 1996):
Set forth below with respect to each nominee for director are his name and
age, any positions held with the Corporation, other principal occupations during
the past five years, other directorships and business affiliations, the year in
which he first became a director, and the number of shares of Common Stock
beneficially owned by such director. Also set forth below is the number of
shares of Common Stock beneficially owned by all directors and officers of the
Corporation as a group.
<TABLE>
<CAPTION>
SHARES OF
COMMON
HAS STOCK
BEEN A BENEFICIALLY
NAME, AGE, POSITIONS WITH THE CORPORATION, DIRECTOR OWNED
OTHER PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS(a) SINCE (b)(c)(d)(e)(f)
<S> <C> <C>
Enrique R. Arzac, 55, Professor of Finance and Economics and Director of the Financial 1987 1,554
Management Program, formerly Vice Dean of Academic Affairs, of the Graduate School of
Business, Columbia University. Director of The Adams Express Company, BEA Income Fund,
Inc., BEA Strategic Income Fund, Inc., Brazilian Equity Fund, Chile Fund, Emerging
Markets Infrastructure Fund, Emerging Markets Telecommunications Fund, First Israel
Fund, Latin America Equity Fund, Latin America Investment Fund and Portugal Fund
(investment companies).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON
HAS STOCK
BEEN A BENEFICIALLY
NAME, AGE, POSITIONS WITH THE CORPORATION, DIRECTOR OWNED
OTHER PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS(a) SINCE (b)(c)(d)(e)(f)
<S> <C> <C>
Leigh Carter, 71, Retired President and Chief Operating Officer of The BFGoodrich Co. 1987 1,158
(chemicals, plastics, aerospace), and Chairman of the Board of Tremco Inc.
(construction materials), Director of The Adams Express Company, Armada Funds
(investment company) and Lamson & Sessions Co. (plastics). Previously Director of
Centerior Energy Corp. (electric and gas utility) and Sherwin-Williams Co. (paint).
Allan Comrie, 77, Formerly President and Chief Executive Officer of U.S. & Foreign 1984 1,366
Securities Corp. (investment company). Director of The Adams Express Company. Formerly
a director of Japan Fund, Inc. (investment company) and formerly a trustee of Atlantic
Mutual Companies (insurance).
Daniel E. Emerson, 72, Retired Executive Vice President of NYNEX Corporation, retired 1987 1,289
Chairman of the Board of both NYNEX Information Resources Co. and NYNEX Mobile
Communications Co. Previously, Executive Vice President and Director of New York
Telephone Company. Presently, Chairman, National Board of Directors, YMCA of the U.S.A.
and a member of the Advisory Board of First Federal Savings and Loan Association of
Rochester. Director of The Adams Express Company and Clifford of Vermont (cable and
wire distribution).
Thomas H. Lenagh, 78, Financial Advisor, formerly Chairman of the Board and Chief 1987 1,100
Executive Officer of Greiner Engineering Inc. (formerly Systems Planning Corp.)
(consultants), formerly financial advisor, Aspen Institute (research) and financial
advisor and prior thereto Treasurer of the Ford Foundation (charitable foundation).
Director of CML Group, Inc., Gintel Funds, Clemente Global Growth Fund, and The Adams
Express Company (investment companies), Director of USLIFE Corp., ICN Pharmaceuticals
Inc., Irvine Sensors Corp. (engineering), Franklin Quest Co. (seminar planning) and
V-Band Corp. (telecommunications manufacturing).
W. D. MacCallan, 69, Retired Chairman of the Board and Chief Executive Officer of the 1971 24,006
Corporation. Director, former Chairman of the Board and Chief Executive Officer of The
Adams Express Company, formerly consultant to the Corporation and The Adams Express
Company. Previously, Director of the Hanover Funds, Inc. and the Hanover Investment
Funds, Inc. (investment companies). Presently, Trustee, Vista Family of Mutual Funds
(seven funds).
Augustine R. Marusi, 83, Retired Chairman of the Board of Borden, Inc. (food and 1987 13,200
chemicals). Presently a Director of The Adams Express Company.
W. Perry Neff, 69, Private Financial Consultant, Retired Executive Vice President of 1971 471
Chemical Bank. Director of The Adams Express Company and North American Life Assurance
Company and ManuLife Financial (insurance). Previously, Chairman of the Board and
Director of both the Hanover Funds, Inc. and the Hanover Investment Funds, Inc.
(investment companies) and a Director of Van Deventer & Hoch (investment company).
Presently, Trustee, Vista Family of Mutual Funds (seven funds).
*Douglas G. Ober, 50, Chairman of the Board and Chief Executive Officer of the 1989 39,350
Corporation since April 1, 1991. Director, Chairman of the Board and Chief Executive
Officer of The Adams Express Company.
Landon Peters, 66, Private Investor, formerly Investment Manager, Y.M.C.A. Retirement 1987 800
Fund. Formerly Executive Vice President and Treasurer and prior thereto Senior Vice
President and Treasurer of The Bank of New York. Director of The Adams Express Company.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON
HAS STOCK
BEEN A BENEFICIALLY
NAME, AGE, POSITIONS WITH THE CORPORATION, DIRECTOR OWNED
OTHER PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS(a) SINCE (b)(c)(d)(e)(f)
<S> <C> <C>
John J. Roberts, 74, Vice-Chairman, External Affairs, American International Group, Inc. 1987 818
(insurance). Formerly Chairman and Chief Executive Officer of American International
Underwriters Corporation (insurance). Previously President of American International
Underwriters Corporation-U.S./Overseas Operations. Director of American International
Group, Inc. and The Adams Express Company.
Robert J. M. Wilson, 76, Retired President of the Corporation. Director and retired 1975 6,812
President of The Adams Express Company.
Directors and executive officers of the Corporation as a group. 220,031
</TABLE>
* Mr. Ober is an "interested person" as defined by the Investment Company Act
of 1940, because he is an officer of the Corporation.
(a) Each nominee is also a nominee for the Board of Directors of The Adams
Express Company (see "Principal Stockholder" below).
(b) To the Corporation's knowledge, each director had sole investment and voting
power with respect to the shares shown opposite his name above except Mr.
Lenagh, who had only investment power, and other than shares referred to in
footnotes (c), (d) and (e) below.
(c) Of the amounts shown, 5,943 shares beneficially owned by Mr. Ober were held
by the Trustee under the Employee Thrift Plan of the Corporation. The Trust
Agreement under such plan provides that plan participants have sole voting
power but no investment power with respect to such shares.
(d) Of the amounts shown as beneficially owned by the directors and executive
officers as a group, 29,874 shares were held by the Trustee under the
Employee Thrift Plan.
(e) The amounts shown include shares subject to option under the Corporation's
Stock Option Plan (see "Stock Option Plan" below) by Mr. Ober (33,376
shares), and directors and executive officers as a group (143,552 shares).
Mr. Ober and the officers with shares subject to option all disclaim
beneficial ownership of those shares.
(f) Calculated on the basis of 13,065,819 shares of Common Stock outstanding on
December 31, 1996, each director owned less than 1.0% of the Common Stock
outstanding. The directors and executive officers as a group owned 1.7% of
the Common Stock outstanding.
4
<PAGE>
The nominees listed below are also nominees for election to the Board of
Directors of The Adams Express Company ("Adams"), the Corporation's largest
stockholder (see "Principal Stockholder" below), and at December 31, 1996
beneficially owned the number of shares of Adams common stock shown next to
their respective names. Of these Adams shares, 14,883 were held by the Trustee
of the Adams' Employee Thrift Plan for Mr. Ober, as to which he had sole voting
and no investment power and 51,164 shares are subject to option by Mr. Ober. He
disclaims beneficial ownership of these latter shares.
NOMINEE ADAMS SHARES NOMINEE ADAMS SHARES
Enrique R. Arzac 4,357 Augustine R. Marusi 92,819
Leigh Carter 2,327 W. Perry Neff 3,126
Allan Comrie 5,200 Douglas G. Ober 66,089
Daniel E. Emerson 3,555 Landon Peters 4,218
Thomas H. Lenagh 1,174 John J. Roberts 4,007
W. D. MacCallan 98,280 Robert J. M. Wilson 29,497
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director and officer of the Corporation who is subject to Section 16
of the Securities Exchange Act of 1934 is required to report to the Securities
and Exchange Commission by a specified date his or her beneficial ownership of
or transactions in the Corporation's securities. Except as noted below, the
Corporation has no reason to believe that such directors and officers have not
filed all requisite reports with the Securities and Exchange Commission on a
timely basis during 1996.
In August 1996, new rules under Section 16 necessitated the reporting of
option exercises in the next month, rather than on a deferred basis as
previously permitted. In October, 1996, Ms. Jones and Messrs. Koloski, Truta and
Whitney exercised stock appreciation rights granted in tandem with their stock
options and did not report such exercises. Such exercises have since been
reported. In December 1996, Mr. Ober exercised stock appreciation rights granted
in tandem with his stock options and did not report such exercise. This exercise
has since been reported.
INFORMATION AS TO OTHER EXECUTIVE OFFICERS
Set forth below are the names, ages and positions with the Corporation and
Adams of all executive officers of the Corporation other than those who also
serve as directors. Executive officers serve as such until the election of their
successors.
Ms. Maureen A. Jones, 49, has served as Treasurer since January 1, 1993,
and was Assistant Treasurer from April 1, 1991 to December 31, 1992, of the
Corporation and Adams. From May 1, 1988 to March 31, 1991, she served as
Assistant to the Treasurer of the Corporation and Adams. Prior thereto, she was
a senior auditor with Coopers & Lybrand.
Mr. Richard F. Koloski, 52, has served as President of the Corporation
since April 1, 1986 and Executive Vice President of Adams since January 1, 1986.
Mr. Joseph M. Truta, 52, has served as Executive Vice President of the
Corporation since January 1, 1986 and President of Adams since April 1, 1986.
Mr. J. G. Whitney, 55, has served as Vice President and Secretary of the
Corporation and Adams since October 1, 1984 and was Secretary of both from 1976
to September 30, 1984.
5
<PAGE>
SHARES OF
COMMON STOCK
SECURITY OWNERSHIP OF MANAGEMENT (a) BENEFICIALLY
NAME OWNED (b)(c)(d)(e)
Maureen A. Jones ........................................ 11,560
Richard F. Koloski ...................................... 56,302
Joseph M. Truta ......................................... 47,349
J. G. Whitney............................................ 12,896
(a) Share ownership of directors and executive officers as a group is shown in
the table beginning on page 2 and footnotes thereto.
(b) To the Corporation's knowledge, each officer had sole investment and voting
power with respect to the shares shown opposite his or her name above other
than shares referred to in footnote (c) below.
(c) Of the amounts shown, the following shares beneficially owned by the
respective officer were held by the Trustee under the Employee Thrift Plan
of the Corporation: Ms. Jones (793 shares), Mr. Koloski (11,606 shares), Mr.
Truta (5,653 shares) and Mr. Whitney (5,879 shares). The Trust Agreement
under such plan provides that plan participants have sole voting power but
no investment power with respect to such shares.
(d) The amounts shown include shares subject to option under the Corporation's
Stock Option Plan (see "Stock Option Plan" below), by Ms. Jones (10,767
shares), Mr. Koloski (44,696 shares), Mr. Truta (41,696 shares) and Mr.
Whitney (7,017 shares).
(e) Calculated on the basis of 13,065,819 shares of Common Stock outstanding on
December 31, 1996, each of the officers listed above owned less than 1.0% of
the Common Stock outstanding.
PRINCIPAL STOCKHOLDER
At December 31, 1996, only one person or group of persons was known by the
Corporation to own beneficially more than five percent of any class of the
Corporation's voting securities.
AMOUNT AND
NATURE OF
TITLE OF NAME AND ADDRESS BENEFICIAL PERCENT
CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
Common Stock The Adams Express Company 1,145,570 shs. 8.8%
Seven St. Paul Street direct
Baltimore, Maryland 21202
BOARD MEETINGS
The Board of Directors held twelve meetings during 1996 at which overall
attendance was approximately 92.4%. Each Director attended at least 75% of the
total of all (i) meetings of the Board and (ii) meetings of committees of the
Board on which he served, in 1996.
6
<PAGE>
AUDIT COMMITTEE OF THE BOARD
Messrs. Comrie, Lenagh, MacCallan and Wilson, none of whom is an
"interested person," constitute the membership of the Board of Directors' Audit
Committee, which met twice during 1996. The Audit Committee (1) recommends to
the Board of Directors the firm of independent accountants which is to be
engaged to audit the books of account and other corporate records of the
Corporation, (2) reviews with the independent accountants the scope of their
audit with particular emphasis on the areas to which either the Committee or the
independent accountants believe special attention should be directed, (3)
reviews the recommendations of the independent accountants regarding internal
controls and other matters, and (4) makes reports, whenever deemed advisable, to
the Board of Directors with respect to the internal control and accounting
practices of the Corporation. The Audit Committee also reviews the audit and
non-audit fees of the independent accountants.
EXECUTIVE COMMITTEE OF THE BOARD
Messrs. Carter, Emerson, Marusi, Ober*, Neff, Peters and Wilson constitute
the membership of the Board's Executive Committee, which met twice during 1996.
The Committee has the authority of the Board of Directors between meetings of
the Board except as limited by law, the Corporation's By-Laws, or Board
resolution. The Executive Committee also performs the duties of a nominating
committee. It recommends to the full Board candidates for directorship. It is
the policy of the Executive Committee not to consider unsolicited nominations
for director.
COMPENSATION COMMITTEE OF THE BOARD
Messrs. Arzac, Carter, Emerson, Marusi and Peters constitute the membership
of the Board's Compensation Committee, which met five times during 1996. The
Compensation Committee reviews and recommends changes in the salaries of
directors, officers and employees, and advises upon the compensation and stock
option plans in which the executive officers, officers and employees of the
Corporation are eligible to participate.
BOARD OF DIRECTORS COMPENSATION
During 1996, each director who is not an interested person received an
annual retainer fee of $6,000 and a fee of $350 for each Board meeting attended.
All members of each Committee, except executive officers and/or interested
persons, receive an additional annual retainer fee of $1,500 for each committee
membership and a fee of $350 for each meeting attended. Messrs. Arzac, Comrie,
Lenagh, MacCallan and Neff are the director members of the Retirement Benefits
Committee of the Corporation and Adams, which administers the Employees'
Retirement Plans, Supplemental Retirement Plans and the Employee Thrift Plans of
the Corporation and Adams. For this committee assignment these directors receive
an annual retainer fee of $1,500 and a fee of $350 for each meeting attended.
The total amount of fees paid to "disinterested person" directors in 1996 was
$151,500.
TRANSACTIONS WITH PRINCIPAL STOCKHOLDERS
The Corporation shares certain expenses with Adams, of which all the above
named nominees are directors. These expenses are initially paid by Adams, which
is reimbursed by the Corporation either in proportion to the size of the
respective investment portfolios of the two companies or, where possible, on an
actual usage basis. In 1996 the Corporation's share of such expenses was
$539,508 for research, accounting services and other office services (including
proportionate salaries and other employee benefits), rent and related expenses
and miscellaneous expenses such as office supplies, postage, subscriptions and
travel.
* Mr. Ober is an "interested person."
7
<PAGE>
REMUNERATION OF DIRECTORS AND OTHERS
The following table sets forth for each of the persons named below the
aggregate current remuneration received from the Corporation and Adams during
the fiscal year ended December 31, 1996 for services in all capacities:
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS
ACCRUED DURING
THE LAST ESTIMATED ANNUAL
AGGREGATE FISCAL BENEFITS UPON
NAME OF PERSON, POSITION REMUNERATION (1)(2)(3)(4) YEAR (5) RETIREMENT
<S> <C> <C> <C> <C>
Douglas G. Ober Chairman of the Board
and Chief Executive
Officer $ 368,000 -- $139,920
Richard F. Koloski President 273,000 -- 137,940
Joseph M. Truta Executive Vice
President 262,000 -- 123,750
Enrique R. Arzac Director (C)(D) 28,500 N/A N/A
Leigh Carter Director (A)(C) 27,750 N/A N/A
Allan Comrie Director (B)(D) 27,750 N/A N/A
Daniel E. Emerson Director (A)(C) 30,550 N/A N/A
Thomas H. Lenagh Director (B)(D) 27,750 N/A N/A
W. D. MacCallan Director (B)(D) 27,800 N/A N/A
Augustine R. Marusi Director (A)(C) 28,450 N/A N/A
W. Perry Neff Director (A)(D) 28,500 N/A N/A
Landon Peters Director (A)(C) 29,850 N/A N/A
John J. Roberts Director 18,300 N/A N/A
Robert J. M. Wilson Director (A)(B) 27,800 N/A N/A
</TABLE>
(A) Member of Executive Committee
(B) Member of Audit Committee
(C) Member of Compensation Committee
(D) Member of Retirement Benefits Committee
(1) Of the amounts shown, direct salaries paid by the Corporation to Messrs.
Ober, Koloski and Truta were $82,200, $132,300 and $56,400, respectively. Of
the amounts shown, Adams paid non-deferred salaries to Mr. Ober, $187,232,
Mr. Koloski, $53,298, and Mr. Truta, $125,484, the remainder of amounts
shown were paid by the Corporation. Of the amounts shown, $4,568 for Mr.
Ober, $3,402 for Mr. Koloski and $6,116 for Mr. Truta was deferred
compensation under the Employee Thrift Plan paid by Adams for the respective
employee's account. Of the Corporation's direct salaries, $4,932 for Mr.
Ober, $6,098 for Mr. Koloski, $3,384 for Mr. Truta was deferred compensation
under the Corporation's Employee Thrift Plan. The non-employee Directors do
not participate in either Thrift Plan.
(2) The Corporation and Adams each offer an Employee Thrift Plan (see "Employee
Thrift Plan" below) to their respective employees under which contributions
are made to match the contributions made by eligible employees and each paid
bonuses to certain officers. Of the amounts shown, $32,364,
8
<PAGE>
$57,696 and $23,268 were bonuses and/or plan contributions for Messrs. Ober,
Koloski and Truta, respectively. Adams made contributions and/or paid
bonuses of $61,636 for Mr. Ober, $26,304 for Mr. Koloski and $50,732 for Mr.
Truta, respectively. The non-employee Directors do not receive bonuses from
either company.
(3) In addition, $124,267 for Mr. Ober, $83,913 for Mr. Koloski and $175,750 for
Mr. Truta was the net gain realized by them upon the exercise of stock
appreciation rights during 1996 granted under the Corporation's Stock Option
Plan (see "Stock Option Plan" below).
(4) Of the amounts shown for non-employee Directors, exactly one-half was paid
by Adams.
(5) The Corporation and Adams each have a noncontributory Employees' Retirement
Plan. No contributions were made by the Corporation or Adams to its
respective plans in 1996.
STOCK OPTION PLAN
On December 12, 1985, the Corporation's Board of Directors adopted a Stock
Option Plan (the "Plan"), which was approved by the stockholders at the March
26, 1986 Annual Meeting of Stockholders and amended at the March 29, 1994 Annual
Meeting of Stockholders. The Plan provides for the grant to "key employees" (as
defined in the Plan) of options to purchase an aggregate maximum of 815,000
shares of Common Stock of the Corporation, together with related stock
appreciation rights, of which (i) 335,000 shares may be made subject to options
granted between December 12, 1985 and December 11, 1995, and (ii) 480,000 shares
may be made subject to options granted between December 9, 1993 and December 8,
2003. All options granted or to be granted under the Plan currently will be
treated as non-qualified stock options under the Internal Revenue Code. The Plan
is administered by the Compensation Committee of the Board of Directors which
consists of five members of the Board, none of whom is eligible to receive
grants under the Plan. The grant of options is at the discretion of the
Compensation Committee.
The Plan provides that, among other things, (a) the option price per share
shall not be less than the fair market value of the Common Stock at the date of
grant, except that the option price per share will be reduced after grant of the
option to reflect capital gain distributions to the Corporation's stockholders,
provided that no such reduction shall be made which will reduce the option price
below 25% of the original option price, (b) an option will not become
exercisable until the optionee shall have remained in the employ of the
Corporation for at least one year after the date of grant and may be exercised
for 10 years unless an earlier expiration date is stated in the option and (c)
no option or stock appreciation right shall be granted after December 8, 2003.
The Plan permits the grant of stock appreciation rights in conjunction with
the grant of an option, either at the time of the option grant or thereafter
during its term and in respect of all or part of such option. Stock appreciation
rights permit an optionee to request to receive (a) shares of Common Stock of
the Corporation with a fair market value, at the time of exercise, equal to the
amount by which the fair market value of all shares subject to the option in
respect of which such stock appreciation right was granted exceeds the exercise
price of such option, (b) in lieu of such shares, the fair market value thereof
in cash, or (c) a combination of shares and cash. Stock appreciation rights are
exercisable beginning no earlier than two years after the date of grant and
extend over the period during which the related option is exercisable. To the
extent a stock appreciation right is exercised in whole or in part, the option
in respect of which such stock appreciation right was granted shall terminate
and cease to be exercisable.
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No disposition of shares of Common Stock acquired as the result of the
exercise of an option or stock appreciation right may be made within the later
of two years of the date of grant of the option and within one year of the
acquisition of such shares.
EMPLOYEE THRIFT PLAN
Employees of the Corporation who have completed six months of service may
elect to have 2% to 6% of their base salary deferred as a contribution to a
thrift plan instead of being paid to them currently (see table set forth on page
8 regarding 1996 contributions for the officers and directors identified
therein). The Corporation (subject to certain limitations) contributes for each
employee out of net investment income an amount equal to 200% of each employee's
contribution or to the maximum permitted by law. Employees may also contribute
an additional 10% of base salary to the thrift plan, but these post-tax
contributions are not matched by the Corporation. All employee contributions are
credited to the employee's individual account. Employees may elect that their
salary deferral and other contributions be invested in a fixed income fund, an
intermediate bond fund, Common Stock, common stock of Adams or a combination of
the four. The Corporation's contributions are invested entirely in its Common
Stock. An employee's interest in amounts derived from the Company's
contributions becomes non-forfeitable upon completion of 36 months of service or
upon death or retirement. Payments of amounts not withdrawn or forfeited under
the thrift plan may be made upon retirement or other termination of employment
in a single distribution, in ten equal installments, or in an annuity.
EMPLOYEES' RETIREMENT PLAN
The respective employees of the Corporation and Adams with one or more
years of service participate in similar retirement plans pursuant to which
contributions are made solely by the respective employers on behalf of, and
benefits are provided for, employees meeting certain age and service
requirements. The plans provide for the payment of benefits in the event of an
employee's retirement at age 62 or older. Upon such retirement, the amount of
the retirement benefit is 2% of an employee's final thirty-six months average
annual salary including bonuses, multiplied by years of service. Retirement
benefits cannot exceed 55% of final thirty-six months average annual salary
including bonuses. The criteria for calculation of retirement benefits under
Adams' plan are the same. Benefits are payable in several alternative methods,
each of which must be the actuarial equivalent of a pension payable for the life
of the employee only. Retirement benefits (subject to any applicable reduction)
are also payable in the event of an employee's early or deferred retirement,
disability or death. Contributions are made to a trust to fund these benefits.
On March 10, 1988, the Board of Directors of each of the Corporation and
Adams unanimously approved a supplemental retirement benefits plan (together,
the "Supplemental Plans") for employees of the Corporation or Adams, as the case
may be. The purpose of each of the Supplemental Plans is to provide deferred
compensation in excess of benefit limitations imposed by the Internal Revenue
Code on tax-qualified defined benefit plans, including the retirement plans of
the Corporation and Adams described above. In accordance with such limitations,
the annual benefit payable under each retirement plan may not exceed the lesser
of $125,000 for 1997 and the employee's average total compensation paid during
the three highest-paid consecutive calendar years of employment. The $125,000
limit will be adjusted annually by the Secretary of the Treasury to reflect
cost-of-living increases. In addition, the Internal Revenue Code limits the
amount of benefits payable to beneficiaries of the tax-qualified retirement plan
of each of the Corporation and Adams who are also participants in the respective
employee
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thrift plan of the Corporation or Adams, as the case may be, if the combination
of projected annual retirement benefits under such retirement plan and annual
contributions under such employee thrift plan exceeds certain limits.
The Supplemental Plans authorize the Corporation or Adams, as the case may
be, to pay annual retirement benefits to beneficiaries under its respective
retirement plan in an amount equal to the difference between the maximum
benefits payable under such retirement plan and the benefits that would
otherwise be payable but for the Internal Revenue Code's limitations on annual
retirement benefits. All amounts payable under the Supplemental Plans will be
paid from the general funds of the responsible company as benefits become due,
neither the Corporation nor Adams has established a trust or other funding
vehicle for its Supplemental Plan. Payment of benefits under the Supplemental
Plans will be made concurrently with and in the same form as payment of benefits
under the related retirement plan. During 1996, the Corporation and Adams made
payments of $15,467 and $18,844 under their respective Supplemental Plans.
BROKERAGE COMMISSIONS
During the past fiscal year the Corporation paid brokerage commissions on
the purchase and sale of portfolio securities in the amount of $253,883,
substantially all of which were paid to brokers providing research and other
investment services to the Corporation. The average per share commission rate
paid by the Corporation was $0.0630. No commissions were paid to an affiliated
broker.
PORTFOLIO TURNOVER
Portfolio turnover rate (purchases or sales, whichever is lower, as a
percentage of weighted average portfolio value) for the past three years has
been as follows:
1996 1995 1994
15.50% 15.86% 10.95%
EXPENSE RATIO
The ratio of expenses to the average net assets of the Corporation for the
past three years has been as follows:
1996 1995 1994
0.63% 0.57% 0.42%
(b) RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Investment Company Act of 1940 (the "Act") requires, in effect, that
the Corporation's independent accountants be selected by a majority of those
members of the Board of Directors who are not "interested persons" (as defined
by the Act) of the Corporation; that such selection be submitted for
ratification or rejection at the annual meeting of stockholders; and that the
employment of such independent accountants be conditioned on the right of the
Corporation by vote of the holders of a majority of its outstanding voting
securities to terminate such employment at any time without penalty. In
accordance with such provisions, Coopers & Lybrand L.L.P., 217 E. Redwood
Street, Baltimore, Maryland, independent accountants, which firm was the
Corporation's principal auditor during the year 1996 has been
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selected as independent accountants of the Corporation to audit the books and
accounts of the Corporation for or during the year ending December 31, 1997, by
a majority of those members of the Board of Directors who were not "interested
persons" of the Corporation, voting in person, and their selection is submitted
to the stockholders for ratification by the affirmative vote of a majority of
all votes cast at the meeting. Representatives of Coopers & Lybrand L.L.P. are
expected to be present at such meeting to make a statement if they desire to do
so and they are expected to be available to respond to appropriate questions.
Coopers & Lybrand L.L.P. does not have any direct financial or any material
indirect financial interest in the Corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS RATIFICATION OF THE SELECTION
OF COOPERS & LYBRAND L.L.P.
OTHER MATTERS AND ANNUAL REPORT
As of the date of this proxy statement, management knows of no other
business that will come before the meeting. Should other business be properly
brought up, it is intended that proxies in the accompanying form will be voted
thereon in accordance with the judgment of the person or persons voting such
proxies.
The Annual Report of the Corporation for the year ended December 31, 1996,
including financial statements, has been mailed to all stockholders entitled to
notice of and to vote at the annual meeting to be held on March 25, 1997. If you
did not receive a copy, you may request one by telephoning J. G. Whitney, Vice
President and Secretary, at (800) 638-2479.
The Corporation has retained Corporate Investor Communications, Inc.
("CIC") to assist in the solicitation of proxies. The Corporation will pay CIC a
fee for its services not to exceed $5,500 and will reimburse CIC for its
expenses, which the Corporation estimates will not exceed $2,500.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy statement and form of
proxy relating to the 1998 Annual Meeting must be received at the office of the
Corporation, Seven St. Paul Street, Baltimore, MD 21202, no later than October
15, 1997.
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PETROLEUM & RESOURCES CORPORATION--PROXY FOR 1997 ANNUAL MEETING
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints W. D. MacCALLAN, W. PERRY NEFF and ROBERT
J. M. WILSON, the proxies, and each of them (with power to act without the
others and with power of substitution) the proxy of the undersigned, for and in
the name of the undersigned, to vote at the Annual Meeting of Stockholders of
Petroleum & Resources Corporation to be held at the Hotel Nikko, (Ballroom III),
222 Mason Street, San Francisco, California, on the 25th day of March, 1997 at
11:00 a.m., and at any adjournment thereof, the shares of stock which the
undersigned would be entitled to vote if personally present.
The undersigned hereby ratifying all action of said proxies, or any of
them, or their or his substitutes or substitute by virtue hereof; and hereby
revoking any authorization to vote such shares heretofore given by the
undersigned to anyone. The undersigned hereby acknowledges receipt of the Notice
of Annual Meeting of Stockholders dated February 12, 1997, and the Proxy
Statement furnished therewith.
If the undersigned fails to specify herein how such shares are to be voted
on said items (a) and (b), they shall be voted "FOR" said proposals.
(over)
PETROLEUM & RESOURCES CORPORATION
P.O. BOX 11130
NEW YORK, N.Y. 10203-0130
<PAGE>
<TABLE>
<S> <C>
(a) ELECTION OF DIRECTORS FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below
</TABLE>
Nominees: Enrique R. Arzac, Leigh Carter, Allan Comrie, Daniel E. Emerson,
Thomas H. Lenagh, W. D. MacCallan, Augustine R. Marusi, W. Perry Neff,
Douglas G. Ober, Landon Peters, John J. Roberts, Robert J. M. Wilson
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions_____________________________________________________________________
(b) THE SELECTION OF COOPERS & LYBRAND L.L.P. as independent public accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(c) In their discretion, the Proxies are authorized to vote upon all other
business that may properly come before the Meeting with all the powers the
undersigned would possess if personally present.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR: PROPOSALS (a) AND (b).
Change of Address or [ ]
Comments Mark Here
NOTE: The signature(s) should correspond with the
name of the stockholder(s) as it appears hereon.
Dated:______________________________________, 1997
Signature_________________________________________
Joint Tenant______________________________________
COMMON
Votes must be indicated [ ]
(x) in Black or Blue ink.
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
