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
PETROLEUM & RESOURCES CORPORATION
(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
FEBRUARY 14, 2000
----------------------------------------------
Notice is hereby given that the Annual Meeting of Stockholders of
PETROLEUM & RESOURCES CORPORATION, a Maryland corporation (the "Corporation"),
will be held at The Colony Palm Beach, 155 Hammon Avenue, Palm Beach, Florida,
on Tuesday, March 28, 2000, at 10:00 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
PricewaterhouseCoopers LLP as the firm of independent accountants to audit the
books and accounts of the Corporation for or during the year ending December
31, 2000;
(c) to consider and vote upon a proposed amendment to Article SIXTH of the
Articles of Incorporation to increase the number of authorized shares of Common
Stock of the Corporation from 25,000,000 shares to 50,000,000 shares, and to
remove a class of convertible preferred stock;
(d) to consider and vote upon amending the Corporation's investment policy
to change its subclassification from a diversified investment company to a
non-diversified investment company; and
(e) to transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on February 14,
2000, as the record date for the determination of the stockholders entitled to
notice of and to vote at this meeting.
By order of the Board of Directors,
LAWRENCE L. HOOPER, JR.
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
Baltimore, MD
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
-------------
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 28, 2000, and is first being sent to
stockholders on or about February 23, 2000.
Only stockholders of record at the close of business on February 14, 2000
may vote at the Annual Meeting to be held on March 28, 2000. On the record
date, the Corporation had outstanding 14,054,580 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. For Proposal (a),
referred to below, 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. Proposal (c) referred to below
requires the affirmative vote of a majority of all the shares entitled to be
cast at the meeting. Proposal (d) referred to below requires the affirmative
vote of the lesser of (i) 67% of all the outstanding shares of Common Stock
present or represented at the meeting (assuming that more than 50% of the
outstanding shares of Common Stock are present or represented at the meeting)
or (ii) a majority of all of the outstanding shares of Common Stock. 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. Proxies received by the Corporation that are marked
"without authority" or abstain, or that constitute a broker non-vote, are
counted as present for purposes of determining a quorum at the meeting. Broker
non-votes are shares held in the name of a broker or nominee for which the
broker or nominee indicates that instructions have not been received from the
beneficial owner or person entitled to vote and the broker or nominee does not
have discretionary voting power. Proxies marked "withhold authority",
abstentions and broker non-votes do not count as votes cast with respect to any
proposal. With respect to a proposal requiring the affirmative vote of a
majority of the Corporation's outstanding Common Stock, the effect of proxies
marked "withhold authority", abstentions and broker non-votes is the same as a
vote against the proposal. Otherwise, proxies marked "withhold authority",
abstentions and broker non-votes have no effect on the outcome of a proposal.
The Annual Meeting is being held on March 28, 2000 for the following
purposes: (a) election of directors of the Corporation; (b) ratification of the
selection of PricewaterhouseCoopers LLP as the firm of independent accountants
to audit the books and accounts of the Corporation for or during the year
ending December 31, 2000; (c) the approval of a proposed amendment to the
Articles of Incorporation increasing the authorized shares of Common Stock and
removing a class of convertible preferred stock; (d) approving a change of the
Corporation's investment policy from that of a diversified investment company
to a non-diversified investment company; and (e) 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 that the management
intends to present, or knows that others will present at the meeting, are
Proposals (a), (b), (c) and (d) referred to above. Should any other matter come
before the meeting, however, action may be taken thereon pursuant to proxies in
the form enclosed.
1
<PAGE>
Except for Proposals (a), (b), (c) and (d) referred to above, the proxies
confer discretionary authority on the persons named therein or their
substitutes with respect to any business that may properly come before the
meeting. Stockholders retain the right to revoke executed proxies at any time
before they are voted by written notice to the Corporation, by executing a
later dated proxy, or by appearing and voting at the meeting. Properly executed
proxies 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), (b),
(c) and (d). Under Maryland Law, there are no appraisal or other dissenter
rights with respect to any matter to be voted on at the Annual Meeting that is
described herein.
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, regular employees, and agents 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 of the following nominees to the Board of
Directors for the ensuing year, all of whom have consented to serve if elected:
Enrique R. Arzac W. D. MacCallan Landon Peters
Daniel E. Emerson W. Perry Neff John J. Roberts
Thomas H. Lenagh Douglas G. Ober* Susan C. Schwab
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,
1999**):
Set forth below with respect to each nominee for director are his or her
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 or she first became a director, and the
number of shares of Common Stock beneficially owned by him or her. 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.
- ----------
* Mr. Ober is an "interested person", as defined by the Investment Company Act
of 1940, because he is an officer of the Corporation.
** The information for Dr. Susan C. Schwab is as of January 13, 2000.
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 SINCE (A)(B)(C)(D)
- ----------------------------------------------------------------------------------------- ---------- ---------------
<S> <C> <C>
Enrique R. Arzac, 58, Professor of Finance and Economics, formerly Vice Dean of 1987 1,762
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).
Daniel E. Emerson, 75, Retired Executive Vice President of NYNEX Corporation, 1987 3,757
retired 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, The National YMCA
Fund, Inc. Director of The Adams Express Company and Clifford of Vermont (cable
and wire distribution).
Thomas H. Lenagh, 81, Financial Advisor, formerly Chairman of the Board and Chief 1987 1,268
Executive Officer of Greiner Engineering Inc. (formerly Systems Planning Corp.)
(consultants), formerly financial vice president, Aspen Institute (research), and
financial advisor and prior thereto Treasurer of the Ford Foundation (charitable
foundation). Director of Gintel Fund, Clemente Strategic Fund, and The Adams
Express Company (investment companies), ICN Pharmaceuticals Inc., ASD Group
(electronic contract manufacturing), and Inrad Corp. (crystals).
W. D. MacCallan, 72, Retired Chairman of the Board and Chief Executive Officer of the 1971 13,006
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 (fifty funds).
W. Perry Neff, 72, Private Financial Consultant, Retired Executive Vice President of 1971 759
Chemical Bank. Director of The Adams Express Company. 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 (fifty funds).
*Douglas G. Ober, 53, Chairman of the Board and Chief Executive Officer of the 1989 38,851(e)
Corporation since April 1, 1991. Director, Chairman of the Board and Chief Executive
Officer of The Adams Express Company.
Landon Peters, 69, Private Investor, formerly Investment Manager, Y.M.C.A. Retirement 1987 912
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.
John J. Roberts, 77, Senior Advisor, formerly Vice-Chairman, External Affairs, American 1987 952
International Group, Inc. (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.
Susan C. Schwab, 44, Dean of the School of Public Affairs at the University of 2000+ 0
Maryland, College Park. Formerly Director of Corporate Business Development at
Motorola, Inc. Also served as an Assistant Secretary of Commerce for the U.S. and
Foreign Commercial Service of the U.S. Department of Commerce. Director of
Calpine Corp. (energy) and The Adams Express Company.
Robert J. M. Wilson, 79, 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. 187,262
</TABLE>
- ----------
3
<PAGE>
* Mr. Ober is an "interested person," as defined by the Investment Company Act
of 1940, because he is an officer of the Corporation.
+ Dr. Schwab was elected by the Board of Directors to serve as a director on
January 13, 2000, to fill the vacancy created when Mr. Allan Comrie resigned
as a director.
(a) To the Corporation's knowledge, other than shares referred to in footnote
(c) below, each director had sole investment and voting power with respect
to the shares shown opposite his or her name, except Mr. Lenagh, who had
only investment power.
(b) Of the amounts shown as beneficially owned by the directors and executive
officers as a group, 33,052 shares were held by the Trustee under the
Employee Thrift Plan of the Corporation.
(c) The amounts shown include shares subject to option under the Corporation's
Stock Option Plan (see "Stock Option Plan" below) by Mr. Ober (31,440
shares), and directors and executive officers as a group (124,941 shares).
Mr. Ober and the officers with shares subject to option all disclaim
beneficial ownership of those shares.
(d) Calculated on the basis of 14,314,180 shares of Common Stock outstanding on
December 31, 1999, each director owned less than 1.0% of the Common Stock
outstanding. The directors and executive officers as a group owned 1.3% of
the Common Stock outstanding.
(e) Of the amounts shown, 7,377 shares beneficially owned by Mr. Ober were held
by the Trustee under the Employee Thrift Plan of the Corporation.
The nominees identified above 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).
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. Based upon a review of filings
with the Securities and Exchange Commission and written representations that no
other reports were required, 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 1999.
INFORMATION AS TO OTHER EXECUTIVE OFFICERS
Set forth below are the names, ages and positions with the Corporation 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, 52, has served as Vice President and Treasurer since
January 1, 1998, and as Treasurer since January 1, 1993.
Mr. Richard F. Koloski, 55, has served as President since April 1, 1986.
Mr. Joseph M. Truta, 55, has served as Executive Vice President since
January 1, 1986.
Mr. Lawrence L. Hooper, Jr., 47, has served as Vice President since March
30, 1999, and as Secretary and General Counsel since April 1, 1997. Prior
thereto, he was a partner in Tydings & Rosenberg L.L.P., a Baltimore, Maryland
law firm.
4
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
SECURITY OWNERSHIP OF MANAGEMENT IN THE CORPORATION (A) BENEFICIALLY
NAME OWNED (B)(C)(D)(E)
- ---- -------------------
<S> <C>
Maureen A. Jones ................................... 6,746
Richard F. Koloski ................................. 60,849
Joseph M. Truta .................................... 46,487
Lawrence L. Hooper, Jr. ............................ 5,101
</TABLE>
- ----------
(a) As of December 31, 1999. 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 (d) 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 (1,364 shares), Mr. Koloski (16,159 shares),
Mr. Truta (7,767 shares), and Mr. Hooper (385 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 (5,382
shares), Mr. Koloski (44,690 shares), Mr. Truta (38,720 shares), and Mr.
Hooper (4,709 shares).
(e) Calculated on the basis of 14,314,180 shares of Common Stock outstanding on
December 31, 1999, each of the officers listed above owned less than 1.0%
of the Common Stock outstanding.
5
<PAGE>
PRINCIPAL STOCKHOLDER
At December 31, 1999, 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.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------- --------------------------- ---------------- -----------
<S> <C> <C> <C>
Common Stock The Adams Express Company 1,210,085 shs. 8.5%
Seven St. Paul Street direct
Baltimore, Maryland 21202
</TABLE>
BOARD MEETINGS
The Board of Directors held twelve meetings during 1999, at which overall
attendance was approximately 93.9%. 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 1999, except for Mr. Roberts.
AUDIT COMMITTEE
Messrs. Comrie*, Emerson, Peters and Wilson, none of whom is an
"interested person," constitute the membership of the Board of Directors'
standing Audit Committee, which met twice during 1999. The Audit Committee (1)
recommends to the Board of Directors the firm of independent accountants 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 controls and accounting
practices of the Corporation. The Audit Committee also reviews the audit and
non-audit fees of the independent accountants. The Audit Committee operates
under a written charter that was most recently amended in December 1999.
COMPENSATION COMMITTEE
Messrs. Arzac, Lenagh, MacCallan, and Neff constitute the membership of
the Board's standing Compensation Committee, which met three times during 1999.
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.
EXECUTIVE COMMITTEE
Messrs. Arzac, Comrie*, MacCallan, Neff, Ober**, and Roberts constitute
the membership of the Board's standing Executive Committee, which met twice
during 1999. 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.
- ----------
* Mr. Comrie resigned as a director as of December 31, 1999.
** Mr. Ober is an "interested person."
6
<PAGE>
RETIREMENT BENEFITS COMMITTEE
Messrs. Emerson, Lenagh, Neff, Roberts and Wilson are the director members
of the standing Retirement Benefits Committee of the Corporation, which
administers the Employees' Retirement Plan, Supplemental Retirement Plan and
the Employee Thrift Plan of the Corporation. This Committee met three times
during 1999.
BOARD OF DIRECTORS COMPENSATION
During 1999, each director who is not an interested person received an
annual retainer fee of $10,000 and a fee of $500 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 $500 for each meeting attended; the
Chairman of each committee except for the Executive Committee receives an
additional fee of $500 for each Committee meeting attended. The total amount of
fees paid to "disinterested person" directors in 1999 was $186,500.
TRANSACTIONS WITH PRINCIPAL STOCKHOLDERS
The Corporation shares certain expenses with Adams, of which all the
above-named nominees are also 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 1999 the Corporation's share of such
expenses was $391,126 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. The Securities and Exchange Commission is in
the process of reviewing whether the operating relationship between the
Corporation and Adams, including this expense sharing method, which the
companies have used for over 35 years, complies with the Investment Company Act
of 1940 ("the Act"), which restricts certain types of transactions between
investment companies and their affiliates, including lending or borrowing money
or property between an investment company and its affiliate, or engaging in
other types of joint arrangements. The Corporation does not believe that its
expense sharing arrangement with Adams violates the Act. However, if the
Securities and Exchange Commission determines that the arrangement is
prohibited by the Act, the companies will make such changes to the arrangement
as may be necessary to address the Securities and Exchange Commission's
concerns.
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 during the fiscal
year ended December 31, 1999 for services in all capacities:
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS
ACCRUED DURING ESTIMATED ANNUAL
AGGREGATE THE LAST 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 (A) $174,683 -- $72,820
Richard F. Koloski President 265,383 -- 99,990
Joseph M. Truta Executive Vice
President 88,000 -- 36,575
Enrique R. Arzac Director (A)(C) 22,500 N/A N/A
Allan Comrie* Director (A)(B) 20,000 N/A N/A
Daniel E. Emerson Director (B)(D) 21,000 N/A N/A
Thomas H. Lenagh Director (C)(D) 21,500 N/A N/A
W. D. MacCallan Director (A)(C) 20,500 N/A N/A
W. Perry Neff Director (A)(C) 20,500 N/A N/A
Landon Peters Director (B)(D) 20,500 N/A N/A
John J. Roberts Director (A)(D) 18,000 N/A N/A
Robert J. M. Wilson Director (B)(D) 22,000 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
* Mr. Comrie resigned as a director as of December 31, 1999.
- ----------
(1) Of the amounts shown, direct salaries paid to by the Corporation to Messrs.
Ober, Koloski, and Truta were $71,500, $146,300, and $46,200,
respectively.
(2) Of the Corporation's direct salaries, $2,202 for Mr. Ober, $7,042 for Mr.
Koloski, and $2,200 for Mr. Truta, was deferred compensation under the
Corporation's Employee Thrift Plan. Under the Employee Thrift Plan, the
Corporation also makes contributions to match the contributions made by
eligible employees (see "Employee Thrift Plan" below). Of the amounts
shown, $4,400, $14,084, and $4,400 were plan contributions for Messrs.
Ober, Koloski, and Truta, respectively. The non-employee Directors do not
participate in the Employee Thrift Plan.
(3) Of the amounts shown, $98,780, $105,000, and $37,400 were bonuses accrued
for Messrs. Ober, Koloski, and Truta, respectively, in 1999 and deferred
until January 2000.
(4) In addition, $77,122 for Mr. Ober and $42,132 for Mr. Koloski was the net
gain realized by them upon the exercise of stock appreciation rights
during 1999 granted under the Corporation's Stock Option Plan (see "Stock
Option Plan" below).
(5) The Corporation has a noncontributory Employees' Retirement Plan. No
contributions were made by the Corporation to this plan in 1999.
8
<PAGE>
Messrs. Ober, Koloski, and Truta also received direct salaries, deferred
compensation, thrift plan contributions, and bonuses from Adams, which amounts
were included in this summary table in prior years.
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 four 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 gains distributions to the Corporation's
stockholders, provided that no such reduction shall be made that 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.
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 1999 contributions for the officers and directors identified
9
<PAGE>
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 money
market fund, an intermediate bond fund, Common Stock of the Corporation or of
Adams, or a combination thereof. 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. Payment 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 employees of the Corporation with one or more years of service
participate in a retirement plan pursuant to which contributions are made
solely by the Corporation on behalf of, and benefits are provided for,
employees meeting certain age and service requirements. The plan provides 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. 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 the Corporation unanimously
approved a supplemental retirement benefits plan (the "Supplemental Plan") for
employees of the Corporation. On June 11, 1998, the Supplemental Plan was
amended and restated as of January 1, 1998. The purpose of the Supplemental
Plan 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 plan of the Corporation described above. In accordance
with such limitations, the annual benefit payable under the Corporation's
retirement plan may not exceed the lesser of $135,000 for 2000 and the
employee's average total compensation paid during the three highest-paid
consecutive calendar years of employment. The $135,000 limit will be adjusted
by the Secretary of the Treasury to reflect cost-of-living increases.
The Supplemental Plan authorizes the Corporation to pay annual retirement
benefits to beneficiaries 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 Plan will be
paid from the general funds of the Corporation as benefits become due. The
Corporation has established a funding vehicle using life insurance policies
owned by the Corporation for the Supplemental Plan. Payment of benefits under
the Supplemental Plan will be made concurrently with and in the same form as
payment of benefits under the Corporation's retirement plan. During 1999, the
Corporation made payments of $15,467 under the Supplemental Plan.
10
<PAGE>
BROKERAGE COMMISSIONS
During the past fiscal year, the Corporation paid brokerage commissions in
the amount of $189,214 on the purchase and sale of portfolio securities traded
on the New York Stock Exchange, 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 $0.0601. No
commissions were paid to an affiliated broker.
PORTFOLIO TURNOVER
The 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:
<TABLE>
<CAPTION>
1999 1998 1997
- ------------ ----------- ---------------
<S> <C> <C>
11.89% 12.70% 13.09%
</TABLE>
EXPENSE RATIO
The ratio of expenses to the average net assets of the Corporation for the
past three years has been as follows:
<TABLE>
<CAPTION>
1999 1998 1997
- ----------- ---------- --------------
<S> <C> <C>
0.43% 0.31% 0.47%
</TABLE>
(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, PricewaterhouseCoopers LLP, 250 W. Pratt
Street, Baltimore, Maryland, independent accountants, which firm was the
Corporation's principal auditor during the year 1999, has been selected as
independent accountants of the Corporation to audit the books and accounts of
the Corporation for or during the year ending December 31, 2000, 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 PricewaterhouseCoopers LLP are
expected to be present at the meeting to make a statement if they desire to do
so and to respond to appropriate questions. The Corporation has been informed
that PricewaterhouseCoopers LLP 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 PRICEWATERHOUSECOOPERS LLP.
11
<PAGE>
(C) APPROVAL OF A PROPOSED AMENDMENT TO ARTICLE SIXTH OF THE ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK, AND TO REMOVE A CLASS OF
CONVERTIBLE PREFERRED STOCK, SHARES OF WHICH THE CORPORATION HAS NO
AUTHORITY TO REISSUE
It is proposed that the Articles of Incorporation be amended to increase
the number of authorized shares of Common Stock from 25,000,000 shares to
50,000,000 shares. This increase would be effected by amending the first
paragraph of Article SIXTH so that it will read "The total number of shares of
stock which the Corporation shall have authority to issue is 55,000,000 shares
with an aggregate par value of $50,000,000, divided into two classes consisting
of (a) 50,000,000 shares of Common Stock, par value $1.00 per share, and (b)
5,000,000 shares of Preferred Stock, without par value." Of the 25,000,000
shares of Common Stock currently authorized, as of December 31, 1999,
14,314,180 shares were outstanding, and 336,130 shares were reserved for
issuance under the Company's stock option plan. The additional shares of Common
Stock that would be authorized by the proposed amendment would have the same
rights and privileges and otherwise be identical to the shares of Common Stock
currently authorized and outstanding. The proposed amendment to the Articles of
Incorporation also deletes references to a class of preferred stock known as
Convertible Preferred Stock, par value $25.00 per share. All issued and
outstanding shares of this class of convertible preferred stock were redeemed
by the Corporation and cancelled a number of years ago and the Corporation has
no authority to reissue shares of this class. The proposal to be adopted will
require the affirmative vote of a majority of all the votes entitled to be cast
thereon, being a majority of the issued and outstanding shares of Common Stock.
If the proposal is adopted, the Corporation shall cause Articles of Amendment
to the Articles of Incorporation, substantially in the form of Exhibit A
attached hereto, to be filed with the State Department of Assessments and
Taxation of the State of Maryland. If the proposal is not adopted, it may be
resubmitted to the stockholders at future meetings.
The Board of Directors recommends the adoption of this proposal. If it is
adopted, additional shares of authorized and unissued Common Stock will be
provided which can be issued, without further stockholder approval, by the
Board of Directors, for the payment of dividends and capital gain distributions
to the holders of the Common Stock or, subject to the requirements of the
Investment Company Act of 1940, for such other proper corporate purposes as may
be deemed desirable by the Board of Directors, including for use in connection
with the issuance of any future class of convertible equity security of the
Corporation, possible acquisitions, future stock splits, or the Corporation's
stock option plan. The Board of Directors does not have any present plans to
issue additional shares of Common Stock other than for payment of dividends and
capital gain distributions, and if required, pursuant to the stock option plan.
Holders of the Corporation's shares have no preemptive rights and, as a result,
existing stockholders would not have any preferential right to purchase any of
the additional shares of Common Stock if and when issued.
Although the Board of Directors presently has no plans to do so, the
additional shares of Common Stock could, subject to the applicable laws and
rules, be sold in a public offering. If such an offering occurred, there could,
depending upon a variety of factors, including the rate of return achieved on
the investment of the proceeds of any such offering, be a dilution of the net
income per share of the outstanding Common Stock. Such an offering would also
involve a dilution in the voting rights of the outstanding Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE PROPOSED AMENDMENT.
12
<PAGE>
(D) APPROVAL OF AN AMENDMENT OF INVESTMENT POLICY TO CHANGE THE
CORPORATION'S SUBCLASSIFICATION FROM A DIVERSIFIED INVESTMENT COMPANY TO A
NON-DIVERSIFIED INVESTMENT COMPANY
The Corporation is registered as a diversified investment company under
Section 5 (b) (1) of the Investment Company Act of 1940 ("1940 Act"). In
addition, one of the Corporation's investment policies is that it will restrict
its investments in companies to the levels required for it to qualify as a
diversified company. In this regard, the Corporation currently is subject to
the following investment restriction:
"(2) PERCENTAGES OF ASSETS OR VOTING SECURITIES OF ANY ONE ISSUER WHICH MAY
BE ACQUIRED. The Corporation's policy is to invest such percentage of its
assets in the voting and non-voting securities of any one issuer as its
directors may from time to time approve, provided that the Corporation will
not make any investment if as a result thereof less than 75% of the value of
the Corporation's assets would be invested in cash, cash items, government
securities, securities of other investment companies, and other securities,
which for the purpose of this calculation are limited in respect of any one
issuer to not more than 5% of the value of the Corporation's total assets
and to not more than 10% of such issuer's outstanding voting securities."
As its name suggests, the Corporation is a sector fund that specializes in
investing in the stocks of oil and gas and natural resources companies, and is
invested primarily in energy companies. It is a fundamental policy of the
Corporation that it invest at least 80% of its assets in the securities of
companies "engaged in the petroleum or natural resources industries or
industries connected with, serving and/or supplying the petroleum or natural
resources industries, or in interests in petroleum or natural resources
properties".
There has been a great deal of consolidation in the oil and gas industry,
particularly among large international oil companies that have long been the
largest holdings in the portfolio. At the end of last year, the Corporation
held almost 30% of its portfolio in international oil companies, and the
percentage in 1998 was virtually identical. During 1999, mergers were announced
or completed between, among others, BP and Amoco, and Exxon and Mobil. As a
result, the holdings in these combined companies, unless substantially reduced,
would cause the Corporation to hold more than 25% of its assets in positions
constituting 5% or more of the Corporation's assets. Other mergers and
consolidations have been announced, and the apparent economics of the petroleum
industry suggest that still others may follow. In order for the Corporation to
remain a diversified investment company, and to continue its investment
program, the Corporation must reduce the number of shares that it holds in
important companies that it would prefer to retain. These sales would not be
based upon the investment merits of the companies involved.
To address these changing market conditions and to give the Corporation
the flexibility to increase the number of companies in which it holds 5% or
more of its assets, the Board recommends that the Corporation change its
subclassification under the 1940 Act to that of a non-diversified company.
Concurrently therewith, the Board will amend the investment policy quoted above
to read in its entirety as follows (which policy is a non-fundamental
investment policy of the Corporation):
(2) PERCENTAGES OF ASSETS OR VOTING SECURITIES OF ANY ONE ISSUER WHICH MAY
BE ACQUIRED. The Corporation's policy is to invest such percentage of its
assets in the voting and non-voting securities of any one issuer as its
directors may from time to time approve, provided that the Corporation will
not make any investment if as a result thereof less than 75% of the value of
the Corporation's assets
13
<PAGE>
would be invested in cash, cash items, government securities, securities of
other investment companies, and other securities, which for the purpose of
this calculation are limited in respect of any one issuer to not more than
10% of such issuer's outstanding voting securities.
This proposal would give the Corporation greater investment flexibility
and, in particular, would increase management's ability, where appropriate, to
over-weight positions that represent significant percentages of the energy
sector. The Corporation believes that this increased flexibility may provide
opportunities to enhance the Corporation's performance. At the same time,
investing a larger percentage of the Corporation's assets in companies where
the Corporation's holdings represent 5% or more of its assets increases the
Corporation's exposure to investment and other risks associated with those
companies' financial condition and business operations, including the risk of
default on debt securities. The Corporation will use the increased flexibility
to invest more than 25% of its total assets in 5% or greater holdings of
individual companies' securities only when it believes the securities'
potential return justifies accepting the risks associated with the higher
levels of investment.
Approval of this proposal will not affect the Corporation's compliance
with the requirements of the Internal Revenue Code that enable it to qualify as
a "regulated investment company" for tax purposes. As a non-diversified
investment company, those requirements would permit the Corporation to invest
up to 50% of its assets in company holdings of 5% or greater. Also, as set
forth in the amended investment policy quoted above, approval of this proposal
will not affect the limitation in the Corporation's investment policies that
the Corporation's investments in issuers that are individually more than 10% of
the issuer's outstanding voting securities will not in the aggregate exceed 25%
of the assets of the Corporation. A change in the Corporation's
subclassification also should not otherwise impact upon its operations.
As a non-diversified investment company, the Corporation will be able to
invest a larger portion of its assets in securities of some companies. To the
extent it does so, the Corporation will have proportionally greater exposure to
fluctuations in the value of those companies' securities and to any risks
associated with the financial condition of those companies.
If this proposal is approved, future amendments to the Corporation's
fundamental investment policies will continue to require stockholder approval
as required by the 1940 Act. Note, however, that a future change in the
Corporation's subclassification from a non-diversified investment company to a
diversified investment company would not require stockholder approval. Note
also that the revised investment policy of the Corporation quoted above remains
a non-fundamental investment policy and changes thereto will not require
stockholder approval.
The Board has concluded that the proposed change in the Corporation's
investment policies to change its subclassification from a diversified company
to a non-diversified company will benefit the Corporation and its stockholders.
To become effective, the proposal must be approved by the affirmative vote
of the lesser of (i) 67% of all the outstanding shares of Common Stock present
or represented at the meeting (assuming that more than 50% of the outstanding
shares of Common Stock are present or represented at the meeting) or (ii) a
majority of all of the outstanding shares of Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE PROPOSED CHANGE IN INVESTMENT POLICY.
14
<PAGE>
(E) 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, 1999,
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 28, 2000. A
COPY OF THE CORPORATION'S ANNUAL REPORT WILL BE FURNISHED TO STOCKHOLDERS,
WITHOUT CHARGE, UPON REQUEST. YOU MAY REQUEST A COPY BY TELEPHONING LAWRENCE L.
HOOPER, JR., VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL, AT (800) 638-2479
OR BY SENDING MR. HOOPER AN E-MAIL MESSAGE AT [email protected].
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 $5,000 and will reimburse CIC for its
expenses, which the Corporation estimates will not exceed $2,000.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals for inclusion in the proxy statement and form of
proxy relating to the 2001 Annual Meeting must be received at the office of the
Corporation, Seven St. Paul Street, Baltimore, MD 21202, no later than October
17, 2000.
In addition, pursuant to the Corporation's By-laws, stockholder proposals
for consideration at the 2001 Annual Meeting which are not to be included in
the Corporation's proxy statement and form of proxy must be received at the
office of the Corporation at the address listed in the preceding paragraph no
later than January 27, 2001 in order to be eligible for presentation at the
2001 Annual Meeting. Should the Corporation determine to allow a stockholder
proposal that is received by the Corporation after January 27, 2001 to be
presented at the 2001 Annual Meeting nevertheless, the persons named as proxies
in the accompanying form will have discretionary voting authority with respect
to such stockholder proposal.
15
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
PETROLEUM & RESOURCES CORPORATION
PETROLEUM & RESOURCES CORPORATION, a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
by striking out the first paragraph of Article SIXTH thereof and inserting in
lieu thereof the following:
"SIXTH: The total number of shares of stock which the Corporation shall
have authority to issue is 55,000,000 shares with an aggregate par value
of $50,000,000, divided into two classes consisting of (a) 50,000,000
shares of Common Stock, par value $1.00 per share, and (b) 5,000,000
shares of Preferred Stock, without par value."
SECOND: The Board of Directors of the Corporation at a meeting duly
convened and held on January 13, 2000, adopted a resolution in which was set
forth the foregoing amendment of the Articles of Incorporation, declaring that
said amendment was advisable and directing that it be submitted for action
thereon at the Annual Meeting of Stockholders of the Corporation to be held on
March 28, 2000.
THIRD: Notice setting forth the said amendment of the Articles of
Incorporation and stating that a purpose of the Annual Meeting of Stockholders
would be to take action thereon was given, as required by law, to all
stockholders entitled to vote thereon.
FOURTH: The amendment of the Articles of Incorporation of the Corporation
as hereinabove set forth was approved by the stockholders of the Corporation at
said meeting by the affirmative vote of a majority of all the votes entitled to
be cast thereon, being a majority of the issued and outstanding shares of
Common Stock.
FIFTH: The amendment of the Articles of Incorporation as hereinabove set
forth has been duly advised by the Board of Directors and approved by the
stockholders of the Corporation.
SIXTH: (a) The total number of shares of all classes of stock of the
Corporation heretofore authorized by Article SIXTH of the Articles of
Incorporation of the Corporation is 31,000,000 shares, with an aggregate par
value of $50,000,000, divided into (i) 25,000,000 shares of Common Stock, par
value $1.00 per share, (ii) 5,000,000 shares of Preferred Stock, without par
value, and (iii) 1,000,000 shares of Convertible Preferred Stock, par value
$25.00 per share; (b) the total number of shares of all classes of stock of the
Corporation, as increased by the foregoing amendment to said Article SIXTH, is
55,000,000 shares, with an aggregate par value of $50,000,000, divided into (i)
50,000,000 shares of Common Stock, par value $1.00 per share, and (ii)
5,000,000 shares of Preferred Stock, without par value; and (c) a description,
as amended, of each class of stock of the rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption is set forth in the Articles of Incorporation of the Corporation, as
amended hereby.
16
<PAGE>
IN WITNESS WHEREOF, Petroleum & Resources Corporation has caused these
presents to be signed in its name and on its behalf by its President or one of
its Vice Presidents and its corporate seal to be hereunto affixed and attested
by its Secretary, and the said officers of the Corporation further acknowledged
said instrument to be the corporate act of the Corporation and stated under the
penalties of perjury that to the best of their knowledge, information and
belief the matters and facts therein set forth with respect to the approval
thereof are true in all material respects on March , 2000.
ATTEST: PETROLEUM & RESOURCES CORPORATION
By: --------------------------------- By: -----------------------------------
Name: Name:
Title: Title:
17
<PAGE>
PETROLEUM & RESOURCES CORPORATION - PROXY FOR 2000 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 Colony Palm Beach, 115 Hammon Avenue,
Palm Beach, Florida 33480, on the 28th day of March, 2000 at 10:00 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 14, 2000, and the Proxy Statement furnished
therewith.
IF THE UNDERSIGNED FAILS TO SPECIFY HEREIN HOW SUCH SHARES ARE TO BE VOTED ON
SAID PROPOSALS (A), (B), (C), AND (D), THEY SHALL BE VOTED "FOR" SAID PROPOSALS.
(over)
PETROLEUM & RESOURCES CORPORATION
P.O. BOX 11130
NEW YORK, N.Y. 10203-0130
<PAGE>
(a) ELECTION OF DIRECTORS
FOR all nominees [ ]
listed below
WITHHOLD AUTHORITY to vote [ ]
for all nominees listed below
*EXCEPTIONS [ ]
Nominees: Enrique R. Arzac, Daniel E. Emerson, Thomas H. Lenagh,
W. D. MacCallan, W. Perry Neff, Douglas G. Ober*, Landon Peters,
John J. Roberts, Susan C. Schwab, Robert J. M. Wilson
* Mr. Ober is an "interested person," as defined by the Investment Company Act
of 1940, because he is an officer of the Corporation.
(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 PricewaterhouseCoopers LLP as independent public
accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(c) THE APPROVAL OF AN AMENDMENT TO the Articles of Incorporation increasing the
number of authorized shares of Common Stock of the Corporation from
25,000,000 shares to 50,000,000 shares and removing a class of Convertible
Preferred Stock, shares of which the Corporation has no authority to
reissue.
FOR [X] AGAINST [X] ABSTAIN [X]
(d) AMEND THE CORPORATION'S INVESTMENT POLICY TO change its subclassification
from a diversified investment company to a non-diversified investment
company.
FOR [X] AGAINST [X] ABSTAIN [X]
(e) 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), (B), (C) AND (D).
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: ________________________________,2000
Signature __________________________________
Joint Tenant _______________________________
COMMON
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
VOTES MUST BE INDICATED [X]
(X) IN BLACK OR BLUE INK.
