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 Sec. 240.14a-11(c) or Sec. 240.14a-12
POGO PRODUCING COMPANY
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 transactions 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:
- --------------------------------------------------------------------------------
/X/ 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:
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<PAGE>
PAUL G. VAN WAGENEN POGO PRODUCING COMPANY
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
March 24, 1995
Dear Shareholders of Pogo Producing Company:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Pogo Producing Company (the "Company"), which will be held in the Century II
Room, Stouffer Renaissance Hotel, Six Greenway Plaza, Houston, Texas 77046, on
Tuesday, April 25, 1995, at 10:00 a.m., CDT (Houston time).
At the meeting you will be asked to consider and vote upon: (1) election of
five directors, each for a term of three years; (2) an amendment to the
Company's Restated Certificate of Incorporation; (3) ratification of the
appointment of independent public accountants to audit the financial statements
of the Company and (4) such other business as may properly come before the
meeting or any adjournment thereof.
We hope that you will find it convenient to attend the meeting in person.
However, whether or not you expect to attend, in order to assure your
representation at the meeting and the presence of a quorum, please date, sign
and promptly mail the enclosed proxy. A return envelope is provided, and no
postage need be affixed if mailed in the United States.
Sincerely,
/S/ Paul G. Van Wagenen
Paul G. Van Wagenen
CHAIRMAN OF THE BOARD
5 GREENWAY PLAZA, SUITE 2700
HOUSTON, TEXAS 77046-0504
P.O. BOX 2504
HOUSTON, TEXAS 77252-2504
713/297-5000
FAX 713/297-5100
POGO PRODUCING COMPANY
P.O. BOX 2504
HOUSTON, TEXAS 77252-2504
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 1995
-------------------
TO THE STOCKHOLDERS OF
POGO PRODUCING COMPANY:
Notice is hereby given that the Annual Meeting of Stockholders of Pogo
Producing Company (the "Company") will be held at the Century II Room, Stouffer
Renaissance Hotel, Six Greenway Plaza, Houston, Texas 77046, on Tuesday, April
25, 1995, at 10:00 a.m., CDT (Houston time), for the following purposes:
1. To elect five members of the board of directors to serve until the
1998 annual meeting;
2. To approve an amendment to the Company's Restated Certificate of
Incorporation increasing the number of authorized shares of the
Company's common stock, par value $1.00 per share, from 43,333,333 to
100,000,000 shares;
3. To approve the appointment of Arthur Andersen LLP, independent public
accountants, to audit the financial statements of the Company for the
year 1995; and
4. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 10, 1995 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
You are cordially invited to attend the meeting in person. Even if you plan
to attend the meeting, however, you are requested to sign, date and return the
accompanying proxy as soon as possible.
By Order of the Board of Directors,
/S/ Ronald B. Manning
RONALD B. MANNING
CORPORATE SECRETARY
POGO PRODUCING COMPANY
5 GREENWAY PLAZA, SUITE 2700
HOUSTON, TEXAS 77046-0504
713/297-5000
---------------
PROXY STATEMENT
---------------
This proxy statement is furnished in connection with the solicitation of
proxies by the board of directors (the "Board of Directors") of Pogo Producing
Company (the "Company") to be voted at the Annual Meeting of Stockholders to be
held at the time and place and for the purposes set forth in the accompanying
notice.
This proxy statement and the accompanying proxy card are being mailed to
stockholders beginning on or about March 24, 1995. The Company will bear the
costs of soliciting proxies in the accompanying form. In addition to the
solicitation of proxies by mail, proxies may also be solicited by telephone,
telegram or personal interview by officers and regular employees of the Company.
The Company also expects to retain D.F. King & Co., Inc., a professional
proxy soliciting firm, to assist in the solicitation of proxies. The Company
anticipates that the fees and expenses it will incur for such service will be
less than $25,000. The Company will reimburse brokers or other persons holding
stock in their names or in the names of their nominees for their reasonable
expenses in forwarding proxy material to beneficial owners of stock.
VOTING OF SHARES
As of the close of business on March 10, 1995, the record date for
determining stockholders entitled to vote at the meeting, the Company had
outstanding and entitled to vote 32,812,261 shares of common stock, par value
$1.00 per share ("Common Stock"). The Company has no other class of stock
outstanding. Each share of Common Stock is entitled to one vote with respect to
the matters to be acted upon at the meeting. Shareholders are not allowed to
cumulate votes in the election of directors. The presence, in person or by
proxy, of the holders of a majority of the votes represented by outstanding
shares of Common Stock is necessary to constitute a quorum at the annual
meeting.
In accordance with Delaware law, a shareholder entitled to vote for the
election of directors can withhold authority to vote for all nominees for
director or can withhold authority to vote for certain nominees for director.
The affirmative vote of the holders of a majority of the shares of Common Stock
present, in person or by proxy, and entitled to vote at the annual meeting of
shareholders is required to (i) elect directors to the Company's board of
directors and (ii) decide any other proposals that may be brought before the
meeting, except that the affirmative vote of holders of a majority of the shares
of Common Stock outstanding is required to approve the proposal to amend the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of the Company's capital stock described below. Abstentions
from proposals are treated as votes against that particular proposal. Broker
non-votes on proposals are treated as votes withheld by the beneficial holders
of the applicable shares and, therefore, such shares are treated as not voting
on the proposal as to which there is the broker non-vote.
All duly executed proxies received before the meeting will be voted in
accordance with the choices specified thereon. As to a matter for which no
choice has been specified in a proxy, the shares represented thereby will be
voted by the persons named in the proxy (1) FOR the election as directors
of the five nominees listed herein, (2) FOR the amendment to the Company's
Restated Certificate of Incorporation described below, (3) FOR the appointment
of Arthur Andersen LLP, independent public accountants, to audit the financial
statements of the Company for 1995 and (4) in the discretion of such persons in
connection with any other business that may properly come before the meeting.
REVOCABILITY OF PROXIES
Stockholders have the unconditional right to revoke their proxies at any
time prior to the voting of their proxies at the annual meeting by (i) filing a
written revocation with the secretary of the Company at the address set forth on
the attached Notice of Annual Meeting of Stockholders, (ii) giving a duly
executed proxy bearing a later date, or (iii) attending the annual meeting and
voting in person. Attendance by stockholders at the annual meeting will not, of
itself, revoke their proxies.
ELECTION OF FIVE DIRECTORS
Unless contrary instructions are set forth on the proxies, it is intended
that the persons named in the proxy will vote all shares represented by proxies
FOR the election as directors of Messrs. Jack S. Blanton, William L. Fisher,
William E. Gipson, Nicholas R. Petry and D. Stephen Slack, each of whom is
presently a director of the Company.
If the five nominees are elected at this meeting, each will serve for a term
of three years ending in 1998. The Restated Certificate of Incorporation of the
Company provides for the classification of the Board of Directors into three
classes having staggered terms of three years each. The eight continuing
directors named below will not be required to stand for election at this
meeting, as their present terms expire in either 1996 or 1997. Should any of
Messrs. Blanton, Fisher, Gipson, Petry or Slack become unable or unwilling to
accept nomination or election, the persons acting under the proxy will vote for
the election, in his stead, of such other person as the Board of Directors may
recommend. Management has no reason to believe that any of the nominees will be
unable or unwilling to serve if elected to office. Proxies cannot be voted for
more than the five nominees listed below.
NOMINEES
The following table sets forth information concerning the five nominees for
election as directors at the 1995 Annual Meeting, including the business
experience of each during the past five years and the number of shares of Common
Stock beneficially owned by each based on information as of February 1, 1995.
2
NOMINEES
COMMON STOCK
BENEFICIALLY
OWNED(1)
---------------------
NUMBER PERCENT
OF OF
NAME AND BUSINESS EXPERIENCE SHARES CLASS(2)
---------------------------- --------- --------
JACK S. BLANTON has been President of Eddy Refining 32,000(3) *
Company since 1958 and is Chairman of the Board of
Houston Endowment, Inc. Mr. Blanton, 67, was elected
to the Board of Directors of the Company in 1991. He
also serves as a director of Ashland Inc., Texas
Commerce Bancshares, Inc., Southwestern Bell
Corporation, Baker Hughes, Inc. and Burlington
Northern, Inc.
WILLIAM L. FISHER has been the Director of the 20,000(3) *
Bureau of Economic Geology and the Director of the
Geology Foundation at the University of Texas at
Austin for more than five years. Dr. Fisher was
formerly the Assistant Secretary -- Energy and
Minerals of the U.S. Department of the Interior.
Dr. Fisher, 62, has served as a Director of the
Company since February 1992. He currently also
serves as a director of Diamond Shamrock, Inc.
WILLIAM E. GIPSON, was President and Chief Operating 109,212(4) *
Officer of the Company from 1977 until his
retirement in 1989. Since then, he has been an
independent petroleum geologist and rancher.
Mr. Gipson, 70, has served as a Director of the
Company since 1970. He currently also serves as
a director of St. George Metals, Inc.
NICHOLAS R. PETRY is Chairman of the Board of Petry 76,000(5) *
Company and Managing Partner of N.G. Petry
Construction Company and Mill Iron Ranches. He has
been engaged in such businesses for more than five
years. Mr. Petry, 76, has served as a Director of
the Company since 1981. He currently also serves as
a director of First Bank System, Inc.
D. STEPHEN SLACK has been Senior Vice President, 61,757(6) *
Chief Financial Officer and Treasurer of the Company
since 1988 and has served as a Director of the
Company since 1989. Mr. Slack was, from 1982 until
1988, regional manager of the Southwest Energy and
Minerals Division of Chemical Bank of New York. He
is 45 years of age.
- ------------
(1) Under regulations of the Securities and Exchange Commission (the "SEC"),
shares are deemed to be "beneficially owned" by a person if he directly or
indirectly has or shares the power to vote or to dispose of such shares,
whether or not he has any economic interest in such shares. In addition, a
person is deemed to own beneficially any shares as to which he has the right
to acquire beneficial ownership within 60 days such as by exercise of an
option or by conversion of another security. Each person has sole power to
vote and dispose of the shares listed opposite his name except as indicated
in other footnotes. Percentages are rounded to the nearest one-tenth of one
percent.
(2) An asterisk indicates less than 1%.
(3) Includes 20,000 shares subject to options exercisable within 60 days.
(4) Includes 47,000 shares of Common Stock subject to options exercisable within
60 days, 5,800 shares of Common Stock held in trust by Mr. Gipson for the
benefit of his children and
3
1,266 shares which could be acquired upon conversion of the Company's 8%
Convertible Subordinated Debentures, due 2005 (the "Convertible
Debentures").
(5) Includes 25,000 shares subject to options exercisable within 60 days.
(6) Includes 7,493 shares of Common Stock held under the Company's
tax-advantaged savings plan, 100 shares held by him in trust for the benefit
of his children, 950 shares held by a trust for the benefit of his children
and 41,340 shares of Common Stock subject to options exercisable within 60
days.
DIRECTORS WITH TERMS EXPIRING IN 1996 AND 1997
The following table sets forth information concerning the eight directors of
the Company not required to stand for re-election at the 1995 Annual Meeting,
including the business experience of each during the past five years and the
shares of Common Stock of the Company beneficially owned by each based on
information as of February 1, 1995.
<TABLE>
CONTINUING DIRECTORS
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED<F1>
------------------------
NUMBER PERCENT OF
NAME AND BUSINESS EXPERIENCE OF SHARES CLASS<F2>
---------------------------- --------- ----------
<S> <C> <C>
TOBIN ARMSTRONG has been engaged for more than five years in the ranching 30,000<F3> *
business. Mr. Armstrong, 71, has served as a Director of the Company since 1977
and his present term expires in 1997.
W.M. BRUMLEY, JR., was Senior Vice President -- Administration and Accounting of 75,467<F4> *
the Company and a member of the Executive Committee from 1977 to 1989. Since
1989, he has managed his personal investments. Mr. Brumley, 66, has served as a
Director of the Company since 1977 and his present term expires in 1996.
JOHN B. CARTER, JR., was elected to the Board of Directors of the Company in 1990 64,253<F5> *
and his present term expires in 1996. From 1987 to 1990, Mr. Carter served as
an Advisory Director of the Company. Prior to 1987, Mr. Carter was Senior Vice
President -- Finance of the Company, a Director and a member of its Executive
Committee. Mr. Carter, 70, is also chairman of Houston National Bank.
GERRIT W. GONG is the Director for Asian Studies for the Center for Strategic and 16,000<F6> *
International Studies, in Washington, D.C., and has served in that capacity for
more than the last five years. From 1987 to 1989 he also served as special
assistant to two U.S. ambassadors to China. Dr. Gong, 41, has served as a
Director of the Company since May, 1993 and his present term expires in 1997.
JOHN STUART HUNT has been engaged for more than five years in managing his 20,850<F7> *
personal investments. Mr. Hunt has served as a Director of the Company since
1983 and his present term expires in 1997. Mr. Hunt, 73, is also a director of
Nomeco Oil & Gas Co. and Katy Industries.
4
FREDERICK A. KLINGENSTEIN has been chairman of Klingenstein, Fields & Co., L.P., 2,592,627<F8><F9> 7.9%
an investment advisory firm, since January 1, 1989. He served as Chairman and
Chief Executive Officer of Wertheim Schroder & Co. Incorporated from 1972 until
1986 and as Co-chairman and a director of such firm from 1986 until 1988. Mr.
Klingenstein, 63, has served as a Director of the Company since 1987 and his
present term expires in 1996.
JACK A. VICKERS is owner of The Vickers Companies and has been engaged for more 25,100<F3> *
than five years in managing his personal investments. Mr. Vickers, 69, has
served as a Director of the Company since 1985 and his present term expires in
1997.
PAUL G. VAN WAGENEN became Chairman of the Board and Chief Executive Officer of 73,515<F10> *
the Company in March 1991. He had previously been elected President of the
Company in 1990. From 1986 to 1990, he served as Senior Vice President and
General Counsel of the Company. Mr. Van Wagenen, 49, has served as a Director
of the Company since 1988 and his present term expires in 1996.
- ------------
<FN>
<F1> See note 1 to table entitled "Nominees."
<F2> An asterisk indicates less than 1%.
<F3> Includes 25,000 shares subject to options exercisable within 60 days.
<F4> The shares listed include 1,873 shares which could be acquired upon
conversion of Convertible Debentures and 56,250 shares subject to options
exercisable within 60 days.
<F5> The shares listed include 4,253 shares which could be acquired upon
conversion of Convertible Debentures and 25,000 shares subject to options
exercisable within 60 days.
<F6> Includes 15,000 shares subject to options exercisable within 60 days.
<F7> Includes 10,000 shares subject to options exercisable within 60 days. In
addition, Mr. Hunt disclaims any voting or dispositive power with respect
to 10,750 shares owned by his wife.
<F8> See note (4) to table entitled "Principal Stockholders."
<F9> Includes 10,000 shares subject to options exercisable within 60 days.
<F10> The shares listed include 10,249 shares held for Mr. Van Wagenen's
account under the Company's Tax-Advantaged Savings Plan and 32,014 shares
subject to options exercisable within 60 days.
</FN>
</TABLE>
ORGANIZATION AND ACTIVITY OF THE BOARD OF DIRECTORS
In addition to the Executive Committee, comprised of Messrs. Van Wagenen
(Chairman), Carter, Klingenstein, Petry and Slack, the Board of Directors has an
Audit Committee comprised of Messrs. Hunt (Chairman), Brumley, Fisher, Gipson
and Gong and a Compensation Committee comprised of Messrs. Carter (Chairman),
Armstrong, Blanton, Klingenstein and Petry. The functions of the Audit Committee
are to recommend to the Board of Directors the firm of independent public
accountants to be engaged to audit the financial statements of the Company, to
review the plan and scope of the audit, to review with the auditors and Company
officers the Company's significant accounting policies and its
5
internal controls, and to have general responsibility in connection with related
matters. The Compensation Committee approves any form of compensation of all
employees of the Company; administers the granting of employment contracts to
certain officers of the Company; and administers the granting of stock options
to certain key employees under the Company's stock option plans. The Board of
Directors has no standing nominating committee.
The Board of Directors held four meetings during 1994. The Audit Committee
held two meetings during the year. The Compensation Committee held two meetings
during the year. No incumbent director attended fewer than 75% of the total
meetings held during 1994 by the Board of Directors and all committees thereof
on which he served.
COMMON STOCK OWNED BY DIRECTORS AND OFFICERS
The following table sets forth information regarding the Common Stock
beneficially owned by each of the Company's executive officers named in the
Summary Compensation Table that appears under "Executive Compensation" and all
of the directors and officers of the Company as a group based on information as
of February 1, 1995.
NUMBER
OF SHARES
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS(2)
- ------------------------------------- ------------ -----------
Stuart P. Burbach.................... 23,151 *
Kenneth R. Good...................... 50,800 *
Sammie M. Shaw....................... 37,913 *
D. Stephen Slack..................... 61,757 *
Paul G. Van Wagenen.................. 73,515 *
All directors and executive officers
as a group (23 persons)............ 3,417,261 10.3%
- ------------
(1) See note (1) to table entitled "Nominees." The shares listed include: (a)
shares subject to options as follows: Mr. Burbach, 17,819 shares; Mr. Good,
34,840 shares; Mr. Shaw, 32,569 shares; Mr. Slack, 41,340 shares; Mr. Van
Wagenen, 32,014 shares; all directors and executive officers as a group,
484,497 shares; (b) shares held under the Tax-Advantaged Savings Plan as
follows: Mr. Burbach, 5,312; Mr. Good, 15,098; Mr. Shaw, 344; Mr. Slack,
7,493; Mr. Van Wagenen, 10,249; all directors and executive officers as a
group, 90,094 shares; and (c) shares that may be acquired upon conversion of
Convertible Debentures as follows: all officers and directors as a group,
7,392 shares.
(2) An asterisk indicates less than 1%.
6
PRINCIPAL STOCKHOLDERS
The following table sets forth, with respect to each person (or "group"
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) who is known by the Company to be the
beneficial owner of more than 5% of the Common Stock of the Company, the number
of shares beneficially owned and the percentage such number constitutes of the
entire class as of March 1, 1995, or as applicable, the date of filing of the
document indicated in footnote (1). To the Company's knowledge, no person or
group holds 5% or more of the Company's Convertible Debentures or 5 1/2%
Convertible Subordinated Notes due 2004 (the "Subordinated Notes").
BENEFICIAL OWNERSHIP(1)
-------------------------------
SHARES PERCENT OF CLASS
------------ ----------------
State Farm Mutual Automobile......... 5,520,077(2) 16.8%
Insurance Company
and certain affiliates
One State Farm Plaza
Bloomington, Illinois 61701
FMR Corp............................. 3,841,971(3) 11.7%
and certain affiliates
82 Devonshire Street
Boston, Massachusetts 02109-3614
Frederick A. Klingenstein,........... 3,248,572(4) 9.9%
John Klingenstein and
Klingenstein, Fields & Co., L.P.
787 Seventh Avenue
New York, New York 10019
- ------------
(1) See footnote (1) to table entitled "Nominees." Information in the table and
footnotes is based on the most recent respective Statement on Schedule 13G
or amendment thereto filed by such persons with the Securities and Exchange
Commission (the "SEC"), except as otherwise known to the Company.
(2) Of such 5,520,077 shares, 3,180,145 shares are reported as beneficially
owned by State Farm Mutual Automobile Insurance Company, 957,766 shares by
State Farm Life Insurance Company, 1,235,766 shares by State Farm Insurance
Companies Employee Retirement Trust and 146,400 shares by State Farm Fire &
Casualty Company. The Schedule 13G filed jointly by such entities indicates
that such entities may be deemed to constitute a group but states that each
such person disclaims beneficial ownership as to all shares not specifically
attributed to such entity in this footnote and disclaims that it is part of
a group.
(3) Of such 3,841,971 shares, 3,818,600 are reported as beneficially owned by
Fidelity Management & Research Company and 23,371 shares (including 22,535
shares issuable upon conversion of the Company's Subordinated Notes) are
reported as beneficially owned by Fidelity Management Trust Company, each of
which is a wholly-owned subsidiary of FMR Corp. Edward C. Johnson 3d and FMR
Corp. each report sole dispositive power with respect to 3,841,971 shares,
sole voting power with respect to only 22,535 shares and no voting power,
either sole or shared, with respect to 3,819,436 shares. Of the 3,818,600
shares reported as beneficially owned by Fidelity Management & Research
Company, 2,649,900 of such shares are reported as being beneficially owned
by Fidelity Magellan Fund. The Schedule 13G states that Mr. Johnson,
together with various trusts for the benefit of Johnson family members,
through their ownership of voting common stock, form a controlling group
with respect to FMR Corp.
7
(4) Frederick A. Klingenstein and his brother John Klingenstein are affiliates
of Klingenstein, Fields & Co., L.P. Of such 3,248,572 shares, 3,248,572
shares are reported as beneficially owned by Klingenstein, Fields & Co.,
L.P., 2,582,627 shares by Frederick A. Klingenstein and 2,558,544 shares by
John Klingenstein. Frederick A. Klingenstein, John Klingenstein and
Klingenstein, Fields & Co., L.P. each reported shared dispositive power with
respect to 2,582,627 shares, 2,558,544 shares and 3,248,572 shares,
respectively, and shared voting power with respect to 1,845,335 shares,
1,996,890 shares and no shares, respectively. Frederick A. Klingenstein and
John Klingenstein each reported sole voting power with respect to 737,292
shares and 561,654 shares, respectively. The shares beneficially owned by
Klingenstein, Fields & Co., L.P. include 5,012 shares issuable upon
conversion of Convertible Debentures. In addition, Frederick A. Klingenstein
beneficially owns, and has sole voting and dispositive power with respect
to, 5,000 shares subject to options exercisable within 60 days. Frederick
Klingenstein disclaims beneficial ownership of a portion of the shares
attributed to him above. John Klingenstein disclaims beneficial ownership of
a portion of the shares attributed to him above. Shares attributed to each
individual include shares owned jointly with his wife, by trusts of which he
is the trustee and by others who have granted him a power of attorney to
vote and dispose of shares.
EXECUTIVE COMPENSATION
I. SUMMARY COMPENSATION TABLE. The following table (the "Summary
Compensation Table") sets forth certain information regarding annual and
long-term compensation of each of the named executive officers of the Company
during 1992, 1993 and 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
-------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------------------- ALL OTHER
OTHER ANNUAL RESTRICTED SECURITIES COMPENSA-
BONUS COMPENSA- STOCK UNDERLYING TION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)<F1> TION ($)<F2> AWARDS OPTIONS (#) ($)<F3>
- ------------------------------------- ---- --------- ------- ------------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul G. Van Wagenen.................. 1994 $ 443,742 $-- $-- $-- 40,000 $ 9,000
Director, Chairman of the 1993 372,492 -- -- -- 41,042 8,994
Board, President and 1992 334,377 -- -- -- 20,000 8,728
Chief Executive Officer
D. Stephen Slack..................... 1994 $ 269,370 $-- $-- $-- 20,000 $ 9,000
Director, Senior Vice 1993 241,247 -- -- -- 20,521 8,994
President -- Finance, 1992 223,750 -- -- -- 12,000 8,728
Chief Financial Officer and
Treasurer
Kenneth R. Good...................... 1994 $ 189,375 $-- $-- $-- 20,000 $ 9,000
Senior Vice President -- 1993 167,500 -- -- -- 20,521 8,994
Land and Budgets 1992 150,625 -- -- -- 12,000 8,728
Stuart P. Burbach.................... 1994 $ 174,375 $-- $-- $-- 8,000 $ 8,969
Vice President and 1993 155,625 -- -- -- 8,208 8,994
Offshore Division Manager 1992 140,108 -- -- -- 5,000 8,728
Sammie M. Shaw....................... 1994 $ 150,290 $-- $-- $-- 8,000 $ 8,985
Vice President -- 1993 141,540 -- -- -- 8,208 8,994
Operations 1992 133,540 -- -- -- 5,000 8,728
- ------------
<FN>
<F1> The Company presently has no bonus plan.
<F2> No executive received perquisites or other personal benefits in any year
shown which exceeded 10% of his salary.
<F3> These amounts represent Company matching contributions to the
Tax-Advantaged Savings Plan (401(k) Plan).
</FN>
</TABLE>
8
II. STOCK OPTION PLANS. OPTION GRANTS TABLE. Shown below is further
information on grants of stock options during 1994 to the named executive
officers which are reflected in the Summary Compensation Table above. The Board
of Directors granted no stock options with stock appreciation rights in 1994.
<TABLE>
OPTION GRANTS IN 1994
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED IN 1994 ($ PER SHARE)<F1> DATE PRESENT VALUE<F2>
- ------------------------------------- ---------- ------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Paul G. Van Wagenen.................. 40,000 16.9% $ 21.9375 July 31, 2004 $ 535,720
D. Stephen Slack..................... 20,000 8.5% $ 21.9375 July 31, 2004 267,860
Kenneth R. Good...................... 20,000 8.5% $ 21.9375 July 31, 2004 267,860
Stuart P. Burbach.................... 8,000 3.4% $ 21.9375 July 31, 2004 107,144
Sammie M. Shaw....................... 8,000 3.4% $ 21.9375 July 31, 2004 107,144
- ------------
<FN>
<F1> The option exercise price was 100% of the fair market value of the Common
Stock on August 1, 1994, the date of grant. Generally, options granted
under the Company's stock option plans to employees become exercisable in
three equal increments on each of the three anniversaries following the
grant date. In addition, if a change of control of the Company were to
occur, the unvested options would become immediately exercisable subject,
in certain instances, to the discretion of the Compensation Committee of
the Board of Directors.
<F2> Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options and applying certain assumptions thereunder,
including an underlying security price on the date of grant equal to the
exercise price set forth above, the expiration set forth above, a risk free
rate of interest during the life of the options equal to 7.11% (the rate of
interest on 10 year U.S. Treasury Bonds on the grant date of the options),
a $0.12 annual dividend rate over the life of the options and volatility
during the life of the options equal to 40.86% (the average monthly price
volatility for the Common Stock for the four years preceding the grant
date).
</FN>
</TABLE>
1994 OPTION EXERCISES AND DECEMBER 31, 1994 VALUES TABLE. The following
table includes information with respect to unexercised options to purchase
Common Stock granted under the Company's stock option plans to the named
executive officers and held by them at December 31, 1994.
<TABLE>
AGGREGATE OPTION EXERCISES IN 1994 AND 1994 OPTION VALUES AT DECEMBER 31, 1994
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS HELD AT OPTIONS AT
ACQUIRED DECEMBER 31, 1994 DECEMBER 31, 1994<F1>
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------- -------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Paul G. Van Wagenen.................. 55,000 890,313 32,014/74,028 $239,972/$138,076
D. Stephen Slack..................... 5,000 78,438 41,340/37,681 399,080/ 75,663
Kenneth R. Good...................... -- -- 34,840/37,681 324,017/ 75,663
Stuart P. Burbach.................... 8,250 124,547 17,819/15,139 182,773/ 30,930
Sammie M. Shaw....................... -- -- 32,569/15,139 339,180/ 30,930
- ------------
<FN>
<F1> Based on the closing price of the Common Stock on the New York Stock
Exchange on December 30, 1994 ($17.75).
</FN>
</TABLE>
9
III. RETIREMENT PLAN. The Company maintains a noncontributory retirement
plan (the "Retirement Plan"), covering all salaried employees, under which the
Company annually makes such contributions as are actuarially necessary to
provide the retirement benefits established under such plan. The following table
shows estimated annual benefits payable under the Retirement Plan upon
retirement at age 65, based on average annual salary during the five highest
consecutive years of the ten years before retirement, to persons having the
average salary levels and years of service specified in the table.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
AVERAGE ANNUAL YEARS OF SERVICE AT RETIREMENT
SALARY BEFORE ---------------------------------------------------------------
RETIREMENT 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$100,000........................... $ 28,639 $ 38,186 $ 47,732 $ 57,278 $ 66,825
200,000........................... 58,639 78,186 97,732 117,278 136,825
300,000........................... 88,639 118,186 147,732 177,278 206,825
400,000........................... 118,639 158,186 197,732 237,278 276,825
500,000........................... 148,639 198,186 247,732 297,278 346,825
600,000........................... 178,639 238,186 297,732 357,278 416,825
</TABLE>
Benefits under the Retirement Plan are based on a percentage of employee
earnings, length of service and certain other factors and are payable upon
normal retirement at age 65, upon early retirement at age 55 or after
termination of employment under certain circumstances. The benefits indicated in
the table are not subject to reduction for Social Security benefits. Annual
benefits under the Retirement Plan are limited to the maximum amount prescribed
by sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended
for pensions payable under tax-qualified retirement plans. For 1994, the annual
compensation of each employee which is to be taken into account under the
Retirement Plan cannot exceed $150,000, and the maximum allowable annual pension
benefit for the plan is limited to $118,800. The Company has entered into
agreements with Messrs. Van Wagenen, Slack and Good to supplement their (and
their spouses) benefits under the Retirement Plan in the event and to the extent
that these Internal Revenue Code limitations reduce the retirement benefits that
would otherwise be payable to such individuals under the Retirement Plan.
Messrs. Van Wagenen, Slack, Good, Burbach and Shaw each have approximately
fifteen, seven, seventeen, three, and thirteen credited years of service,
respectively, under the Retirement Plan.
IV. TAX-ADVANTAGED SAVINGS PLAN. The Company has a Tax-Advantaged Savings
Plan (the "Savings Plan") in which all salaried employees may participate. Under
the Savings Plan, a participating employee may allocate up to 10% of such
employee's salary as a tax-deferred contribution (subject to a maximum dollar
limitation of $9,240 for 1994), and the Company makes matching contributions of
100% of the amount contributed, up to 6% of such employee's salary, subject to
certain Internal Revenue Code limitations.
Funds contributed to the Savings Plan by an employee and the earnings and
accretions thereon may, according to instructions from such employee, be used to
purchase shares of Common Stock or to invest in certain mutual funds managed by
The Vanguard Group of Investment Companies ("Vanguard"), including a
money-market fund, a long-term bond fund, a balanced fund (investing in both
stocks and bonds), a growth and income fund and a growth stock fund. The
employee may redirect the investment of these amounts quarterly. Matching funds
contributed to the Savings Plan by the Company, as well as the full account
balance of each participant as of January 1, 1985, are invested
10
only in Common Stock. All contributions to the Savings Plan are held by entities
controlled by Vanguard. Participants in the Savings Plan may exercise voting
rights over shares of Common Stock held in accounts established under the
Savings Plan for their benefit.
V. SUPPLEMENTAL AND EMPLOYMENT AGREEMENTS. Messrs. Van Wagenen, Slack,
Good and Burbach have entered into two-year employment contracts with the
Company. Such contracts, as renewed and extended in January 1995, provide for
minimum annual salaries for Messrs. Van Wagenen, Slack, Good and Burbach, of
$500,000, $285,000, $205,000 and $190,000, the respective salary levels set by
the Board of Directors upon recommendation of the Compensation Committee for
such individuals in August 1994. The contracts also provide for continuation of
coverage in the Company's employee benefit plans and programs during the
contract term. In addition, upon termination of employment by reason of death or
disability, by the Company without cause, by the employee for good reason, or
within six months after a "change in control" (as defined below) of the Company,
the employee is entitled to (i) compensation theretofore owed, (ii) three years'
salary and bonus, (iii) compensation for retirement benefits that would have
been earned had the employee completed the remaining term of the employment
contract, (iv) coverage under the Company's compensation plans and practices for
the remaining term of the employment contract and (v) payments to compensate the
employee for the imposition of certain excise taxes imposed under the Internal
Revenue Code on payments made to such employee in connection with a change in
control of the Company. "Change of control," as defined in the employment
agreements, includes any actual change in the control or management of the
Company (whether by merger, consolidation, acquisition of assets or stock or
otherwise) which was not initiated by the Company's Board of Directors.
The Company also has a supplemental disability plan under which amounts may
be payable to officers of the Company from time to time in the future.
Supplemental disability amounts are in addition to existing programs and are
designed to bring total monthly disability benefits to a level equal to 60% of
monthly salary at the time of disability. The participants in such plan include
Messrs. Van Wagenen, Slack, Good, Burbach and Shaw.
VI. COMPENSATION OF DIRECTORS. Each director, other than those who are
regularly employed officers of the Company, receives an annual director's fee of
$18,000. In addition, each director, other than those who are regularly employed
officers of the Company, receives a fee of $1,000 for each meeting of the Board
of Directors actually attended and a fee of $250 for each meeting of the
Compensation Committee or Audit Committee actually attended. Pursuant to the
terms of the Company's Amended and Restated 1989 Incentive and Nonqualified
Stock Option Plan, each Non-Employee Director is granted options to purchase
10,000 shares of Common Stock on the first business day of June following such
director's initial election and options to purchase 5,000 shares of Common Stock
each year thereafter. The Company also reimburses directors for travel and
related expenses incurred in attending meetings of the Board of Directors or its
committees.
VII. REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION. The
Compensation Committee of the Board of Directors has furnished the following
report on executive compensation:
The Compensation Committee (referred to hereafter as the "Committee")
periodically reviews the compensation of the Company's executive officers
and customarily meets in July of each year to consider executive officer
compensation generally, as well as specific compensation matters. In 1994,
the Committee followed essentially the same policies and practices that it
had followed during the prior year. In July 1994, the Committee reviewed (i)
personnel evaluations of the
11
Company's key employees including executive officers; (ii) compensation
guidelines suggested to the Company, together with comparables of industry
peer group companies ("Peer Group") prepared by an independent compensation
consultant; (iii) information regarding the Company's results in meeting its
principal business objectives; and (iv) the recommendations of management.
The Committee ultimately approved salary levels and, where appropriate,
stock option grants for Company employees, including executive officers. In
connection with these determinations, the Committee reviewed the general
terms and conditions of employment of all employees of the Company,
including, but not limited to, each executive officer, and considered
compensation practices within the industry. In addition to compensation
studies submitted by the independent consultant, the Committee considered
advice of legal counsel and the individual views of Committee members on the
Company's goals and objectives in reaching its decisions concerning
executive officer compensation, including stock option grants. See Items I
and II above, entitled "Summary Compensation Table" and "Stock Option
Plans," for further information on cash compensation and stock option
grants.
The Peer Group was selected after an examination of all companies in the
Company's industry that had similar property holdings in similar geographic
areas, foreign as well as domestic. From that group, with the help of
outside independent consultants practicing in the field of public company
executive compensation, a list of twenty companies having a statistically
meaningful range of market capitalization and gross revenue were chosen and
analyzed. The companies selected for review for determining competitive
compensation include those five companies comprising the Peer Index for
which cumulative total return information is provided at Item IX below,
entitled "Performance Graph," plus fifteen other companies, which
cumulatively comprise the twenty-company Peer Group described above. Based
upon information provided by the Company's independent consultants,
generally the Company's officers are, in the case of base salary, near the
lower end of base salary and short-term bonus provided executive officers of
Peer Group comparators and, in the case of long-term compensation including
stock options, near the lower end of similar compensation provided to
executive officers of the Peer Group comparators.
The Committee believes, and the executive compensation arrangements so
reflect, that a blend of current cash compensation, fringe benefits, and
long-term incentive compensation is appropriate. Current cash is provided by
salary alone, the Company currently having no bonus plan, whether cash,
stock or otherwise. Executives, like all employees, participate in a
tax-qualified retirement plan and a tax-qualified savings plan maintained by
the Company, (including an excess benefit arrangement adopted in December
1993, which is designed to provide to its executives, including the chief
executive officer and other management employees, benefit opportunities
otherwise curtailed by the application of certain limitations of the tax
code) as well as in certain welfare benefit programs elsewhere described,
which arrangements in the aggregate are substantially similar to those
provided by the Peer Group comparators. Long-term incentive to executives is
achieved through modest grants of stock options priced at market on date of
grant and with traditional terms and conditions.
The Company's only long-term compensation plan is its Stock Option Plan.
No options are granted under that plan at a discount to current market
price; therefore, compensation to an executive from the option plan depends
entirely on increases in the market value of the Company's common stock,
with the result that stock options benefit an executive if, and only to the
extent that, similar benefits are received by the Company's stockholders.
Moreover, the continued service requirements (delayed vesting) applicable to
the stock option grants insure that, in the
12
usual circumstance, the executive must render substantial services after the
grant of options before being able to realize any value with respect to such
grant.
The Committee has adopted its executive compensation policies and
practices with a view to engendering in management the principle that
improving the Company's value is of paramount importance and that Company
value is measured, to a lesser extent, by reference to improvement in the
market value of the Company's common equity as reflected on the national
exchanges on which such equity is traded and, to a greater extent, by the
most recent year's results relating to the principal corporate business
objectives publicly enunciated by the Company in 1993 and established by the
Committee as criteria against which executive officer performance would be
measured during the period August 1993 through July 1994. These objectives
include (i) steadily increasing hydrocarbon production levels, leading to
increased revenues and earnings; (ii) growing the hydrocarbon reserves asset
base; (iii) maintaining appropriate levels of debt and interest for an
entity the size of the Company, and controlling overhead and operating costs
consistent with the Company's activity levels; and (iv) expanding
exploration and production activities into new and promising geographic
areas consistent with the Company's expertise. The Committee determined in
July 1994 that in every case the stated objectives had been demonstrably met
to a high degree of success during the prior twelve-month period. In making
its decisions, the Committee takes into account (i) success in achieving the
principal corporate business objectives articulated above; (ii) evaluations
by the Committee and others of the individual performance and achievement of
executives; (iii) the increase in the Company's value as measured by its
stock price and increase in reserve base; (iv) the individual's prior
compensation level including the number and terms of options already held by
such individual; (v) with respect to individuals that have entered into
employment contracts with the Company, the minimum salaries provided for
therein; and (vi) compensation paid to Peer Group executives. The Committee
does not assign weights to particular factors, and determination by the
Committee of the exact levels of compensation, including salary, fringe
benefit and stock option awards, is based on all factors taken as a whole,
but is ultimately subjective.
In August 1994, the chief executive officer's cash salary compensation
was increased by 22%, with participation in employee benefit plans and
fringe benefit programs remaining essentially constant. The Committee's
determination of the chief executive officer's salary and stock option grant
was based principally on the Company's achievement of its principal business
objectives and the Committee's judgment that the chief executive officer's
compensation package was near the lower end relative to the Peer Group. For
example, with reference to the four principal business objectives enunciated
by the Company and utilized as a measurement criteria by the Committee, (i)
the Company enjoyed an 8% increase in production levels for the 1992-1993
biennium over the preceding biennium, which contributed to a 23% increase in
cash flow and a 36% increase in earnings for 1993 compared to 1992; (ii) the
Company replaced 204% of its proven hydrocarbon reserves produced during the
year, bringing the year-end 1993 proven reserves base to a seven-year high;
(iii) the increases in production, cash flow, earnings and the replacement
of reserves discussed above were accomplished against the backdrop of a 15%
decrease in debt (to a fourteen year low), a 42% decrease in interest
expense (also a fourteen year low); and (iv) the Company increased its
exploration and production activities worldwide during 1993 as reflected in
a 91% increase in the Company's capital expenditures during 1993 compared to
1992. In addition, the Committee noted the substantial contribution the
chief executive officer's management style and work ethic made to the
maintenance of the high morale of Company employees.
13
In addition to its annual July meeting, the Committee also customarily
meets in January of each year. In January 1994, the Committee determined to
renew and to extend the Company's employment contracts. At the time such
contracts were renewed and extended, minimum salaries were established in
each contract which equaled the compensation currently being received by
such key employee, as established in the annual salary review during the
prior August. Seven key employees of the Company presently have such
employment contracts. The Committee believes that the employment contracts
are necessary to secure for the benefit of the Company the services of the
individuals offered the contracts on the terms and conditions therein
stated, and to provide management stability in the event of significant
corporate control events such as a tender offer, significant change in stock
ownership or a proxy contest. See Item V. above, entitled "Supplemental and
Employment Agreements" for further information on certain of the employment
contracts.
Under Section 162(m) of the tax code, certain deductions otherwise
available to the Company by reason of its incurrence of executive
compensation expenses might not be deductible if (i) the aggregate of such
amounts otherwise deductible in a single year by the Company with respect to
one executive exceeds $1,000,000; (ii) the executive officer is the
Company's chief executive officer, or one of the four other most highly
compensated officers (determined in each case as of the last day of the
year); and (iii) there is not available an exception or exemption which
would exclude the compensation from the limitation. Amounts payable or
accrued under (i) the Company's tax-qualified plans; (ii) certain fringe
benefit plans that do not result in income to the executive; and (iii) its
stock option grants will all be excluded in considering whether the
$1,000,000 level for a particular executive in a particular year has been
exceeded. After considering Company estimates of compensation payable to its
executive officers, the fact that stock option compensation will not be
considered in such determination, and the advice of counsel, the Committee
believes that this provision of the tax law is unlikely to have any impact
upon the Company in the near term.
Committee decisions are generally reviewed by the board as a whole
except with respect to those matters that must be peculiarly within the
province of the Compensation Committee in order that the establishment and
operation of the Stock Option Plan comply with SEC Rule 16b-3.
THE COMPENSATION COMMITTEE:
JOHN B. CARTER, JR., Chairman
TOBIN ARMSTRONG
JACK S. BLANTON
FREDERICK A. KLINGENSTEIN
NICHOLAS R. PETRY
14
VIII. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
Company's Compensation Committee of its Board of Directors consists of Messrs.
John B. Carter, Jr. (Chairman), Tobin Armstrong, Jack S. Blanton, Frederick A.
Klingenstein and Nicholas R. Petry. No member of the Compensation Committee was
an officer or employee of the Company or any of its subsidiaries during 1994 or
engaged in any transactions or business relationships during 1994 that would
require disclosure under Item 404 of Regulation S-K under the Securities Act of
1933, as amended, the Exchange Act and the Energy Policy and Conservation Act of
1975 as promulgated by the Securities and Exchange Commission. Mr. Carter was an
officer of the Company from 1977 to 1987 as more fully described under
"Continuing Directors."
IX. PERFORMANCE GRAPH. Set forth below is a line graph comparing the
yearly percentage change in the cumulative total shareholder return on the
Company's Common Stock against the cumulative total return of (i) the Standard &
Poor's 500 Stock Index, (ii) the Standard & Poor's Domestic Oil Index and (iii)
a Peer Index selected by the Company composed of Anadarko Petroleum Corporation,
Apache Corporation, The Louisiana Land & Exploration Company, Maxus Energy
Corporation and Noble Affiliates, Inc. for the period of five fiscal years
commencing December 31, 1989 and ending on December 31, 1994.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------
Pogo ............... 100.00 58.54 54.88 100.00 163.42 173.70
S&P 500 ............ 100.00 96.90 126.43 136.05 149.79 151.76
Peer Index ......... 100.00 84.90 73.39 85.18 111.34 100.44
S&P Domestic Oil ... 100.00 96.51 85.87 91.53 96.35 101.83
Note: The stock price performance for the Company's Common Stock is not
necessarily indicative of future performance. Total Shareholder Return
assumes reinvestment of all dividends.
15
PROPOSED AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO
INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has determined that it is advisable to amend the
first paragraph of Article IV.A. of the Company's Restated Certificate of
Incorporation to increase the authorized Common Stock from 43,333,333 shares to
100,000,000 shares (the "Amendment"). Consequently, the Board of Directors has
approved and recommends a vote FOR the following resolution in order to effect
the Amendment:
"The Restated Certificate of Incorporation of the Company is hereby
amended by deleting the first paragraph of Article IV.A. thereof in its
entirety and replacing such first paragraph in order that such paragraph
shall hereafter read in its entirety as follows:
A. The total number of shares of all classes of stock which the
corporation shall have authority to issue is 102,000,000 shares, divided
into 100,000,000 shares of Common Stock of the par value of $1 per share
(Common Stock) and 2,000,000 shares of Preferred Stock of the par value
of $1 per share (Preferred Stock)."
If the Amendment is adopted by the required vote of shareholders (see
" -- Required Vote and Recommendation"), it will become effective when the
appropriate Certificate of Amendment to the Company's Restated Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware.
The additional shares, when and if issued, would have the same voting and
other rights as presently authorized shares of Common Stock. The holders of
Common Stock do not have preemptive rights to subscribe for additional shares of
Common Stock.
REASONS FOR THE INCREASE IN NUMBER OF AUTHORIZED SHARES
The Restated Certificate of Incorporation currently authorizes the Company
to issue 43,333,333 shares of Common Stock and 2,000,000 shares of preferred
stock. As of December 31, 1994, there were 32,810,261 shares of Common Stock
issued and outstanding and no shares of Preferred Stock issued and outstanding.
In addition, there are 3,476,430 shares of Common Stock reserved for
issuance under the Company's existing Incentive and Nonqualified Stock Option
Plans, 1,139,215 shares reserved for issuance upon conversion of the Company's
Convertible Debentures and 3,887,237 shares reserved for issuance upon
conversion of the Company's Convertible Notes. As of December 31, 1994, this
left only 2,020,190 authorized shares of Common Stock that are not outstanding
or currently reserved for issuance.
The Company has no specific plans or commitments for the issuance of
additional shares of Common Stock other than those currently reserved for
issuance as described above. However, the Board of Directors and management of
the Company believe that additional shares of Common Stock should be authorized
in order to provide flexibility by having authorized, unissued and unreserved
shares of Common Stock available for proper corporate purposes. The Amendment
will ensure that the Company will continue to have additional shares available
for future issuance from time to time for proper corporate purposes, including
to fund working capital and capital expenditures, as well as possible future
acquisitions, stock option or other employee incentive plans or future stock
splits and distributions effected as dividends.
16
The additional shares could be issued at times and under circumstances that
affect the control of the Company. In recommending the proposed increase in the
authorized number of shares of Common Stock, the Board of Directors does not
perceive it to be nor intend it to function as an anti-takeover provision.
Although the flexibility of the Board of Directors to issue additional Common
Stock could enhance the Board's ability to negotiate on behalf of the
shareholders in a takeover situation and also could be used by the incumbent
Board of Directors to make a change of control more difficult, the Board of
Directors has no present intention of issuing any shares of Common Stock for any
anti-takeover purpose. Neither management of the Company nor the Board of
Directors is aware of any existing or planned effort on the part of any party to
accumulate material amounts of any class of its capital stock, or to acquire
control of the Company by means of a merger, tender offer, solicitation of
proxies in opposition to management or otherwise, or to change the Company's
management, nor is the Company aware of any person having made any offer to
acquire the capital stock or any material assets of the Company. It is also
possible that the additional shares could potentially be issued at times and
under circumstances that could have a dilutive effect on earnings per share and
on the equity ownership and voting power of the present holders of Common Stock.
REQUIRED VOTE AND RECOMMENDATION
The approval and adoption of this proposal requires the affirmative vote
of the holders of record at the close of business on March 10, 1995 of a
majority of the shares of the outstanding Common Stock. Accordingly, under
Delaware law and the Company's Restated Certificate of Incorporation and By-
laws, abstentions and broker non-votes would have the same legal effect as a
vote against this proposal, even though this may not be the intent of the
person entitled to vote or giving the proxy. The persons named in the proxy
intend to vote for the approval of the Amendment, unless otherwise instructed.
The Board of Directors recommends voting "FOR" this proposal.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
approved and recommends a vote FOR the appointment of Arthur Andersen LLP as
independent public accountants to audit the financial statements of the
Company for the year 1995. Such firm has examined the Company's accounts since
its organization.
A representative of Arthur Andersen LLP will attend the annual meeting and
will have the opportunity to make a statement and to respond to appropriate
questions.
ANNUAL REPORT
The annual report to stockholders, including financial statements, for the
year ended December 31, 1994 has been mailed to stockholders. The annual
report is not a part of the proxy solicitation material.
PROPOSALS BY SECURITY HOLDERS
Proposals intended to be presented by stockholders at the Company's 1996
Annual Meeting must be received by the Company, at the address set forth on
the first page of this Proxy Statement, no later than November 24, 1995, in
order to be included in the Company's proxy material and form of proxy
relating to such meeting. Stockholder proposals must also be otherwise
eligible for inclusion.
17
COMPLIANCE WITH THE
EXCHANGE ACT AND OTHER MATTERS
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC and the New
York Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
A petition for relief, still pending, pursuant to Chapter 11 of the U.S.
Bankruptcy Code, was filed by Mr. Hunt on June 14, 1993, in the U.S.
Bankruptcy Court for the Northern District of Texas, Dallas Division,
following an adverse judgment which was rendered against him in Winkler
County, Texas. The judgment is under appeal.
OTHER BUSINESS
Management does not intend to bring any business before the annual meeting
other than the matters referred to in the accompanying notice and at this date
has not been informed of any matters that may be presented to the meeting by
others. If, however, any other matters properly come before the meeting, it is
intended that the persons named in the accompanying proxy will vote on such
matters pursuant to the proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ PAUL G. VAN WAGENEN
Paul G. Van Wagenen
CHAIRMAN OF THE BOARD
18
APPENDIX A
PROXY POGO PRODUCING COMPANY PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD TUESDAY, APRIL 25, 1995.
The undersigned hereby appoints Paul G. Van Wagenen and John O.
McCoy, Jr. jointly and severally, proxies, with full power of
substitution and with discretionary authority, to vote all shares
of Common Stock of Pogo Producing Company that the undersigned
would be entitled to vote at the 1995 Annual Meeting of
Stockholders, or at any adjournments thereof, on all matters which
may come before such meeting, all as set forth in the accompanying
Proxy Statement, including the proposals set forth on the reverse
side of this proxy.
IMPORTANT - This Proxy must be signed and dated on the reverse side.
<PAGE>
POGO PRODUCING COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
For All
1. ELECTION OF DIRECTORS - For Withheld Except
Nominees - Jack S. Blanton, William / / / / / /
L. Fisher, William E. Gipson,
Nicholas R. Petry and D. Stephen
Slack
-----------------------------------
Nominee Exception
2. APPROVAL OF AN AMENDMENT to the For Against Abstain
Restated Certificate of / / / / / /
Incorporation.
3. APPROVAL OF THE APPOINTMENT OF For Against Abstain
ARTHUR ANDERSEN LLP as / / / / / /
independent accountants, to
audit the financial statements
of the Company for 1995.
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED, WILL
BE VOTED FOR THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION AND FOR
THE PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP TO AUDIT THE
FINANCIAL STATEMENTS OF THE COMPANY FOR 1995.
The undersigned hereby acknowledges receipt of the
Notice of, and Proxy Statement for, the Annual Meeting
and the 1994 Annual Report to Stockholders of Pogo
Producing Company.
Dated: __________________ , 1995
Signature _______________________________________________
Signature _______________________________________________
NOTE: Please sign exactly as your name appears on this
proxy. Joint owners should each sign. Executors,
Administrators, Trustees, etc. should give their full title.
Corporations should sign full corporate name by
authorized officer.
