HIGH PLAINS CORPORATION
200 W. Douglas, Suite #820
Wichita, Kansas 67202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 17, 1995
The Annual Meeting of Stockholders of High Plains Corporation
(the "Company") will be held at the Wichita Airport Hilton, 2098
Airport Road, Wichita, Kansas, in the Salon Room, on the 17th day
of November, 1995 at 10:00 o'clock a.m. (CST) for the purpose of
considering and voting upon the following matters:
1. To elect two directors to the class whose term expires in 1998.
2. To approve the adoption of an Employee Stock Purchase Plan
for key management employees of the Company.
3. To ratify the appointment of Allen, Gibbs & Houlik, L.C. as
the independent public accountants for the Company.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The stock transfer books of the Company will not be closed, but
only stockholders of record at the close of business on September
29, 1995 will be entitled to notice of and to vote at the meeting.
By order of the Board of Directors
Stanley E. Larson
Chairman of the Board and President
Wichita, Kansas
September 29, 1995
You are cordially invited to come to the Annual Meeting early so
that you may meet informally with management and with Board
nominees. The meeting room will be open from 9:00 a.m. until the
meeting at 10:00 a.m. Refreshments will be served before the
meeting.
IMPORTANT
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE, AND
MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT THE
PROXY BE RETURNED REGARDLESS OF THE NUMBER OF SHARES OWNED.
<PAGE>
High Plains Corporation
200 W. Douglas, Suite #820
Wichita, Kansas 67202
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 17, 1995
GENERAL INFORMATION
The accompanying proxy is furnished by High Plains Corporation
(the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the Annual
Meeting of Stockholders to be held on November 17, 1995, or any
adjournment thereof, and may be revoked by the stockholder at any
time before it is voted by giving a written notice to the Secretary
of the Company, by executing and delivering a proxy with a later
date, or by personal withdrawal of the proxy prior to or at the
meeting. The expense of this solicitation is to be borne by the
Company and the Company will reimburse persons holding stock in
their name or in the names of their nominees, for their expenses in
sending proxies and proxy materials to their principals. The
approximate mailing date of this proxy statement is October 29,
1995.
The Company had outstanding 15,996,289 shares of Common Stock,
par value $.10 per share as of September 29, 1995, the date the
security holders of record entitled to vote at the meeting will be
determined (the "Record Date"). Each share of Common Stock entitles
the holder thereof to one vote. There is cumulative voting in the
election of directors, and each stockholder is entitled to cast a
number of votes equal to the number of voting shares held by the
stockholder at the Record Date multiplied by the number of
directors to be elected and may cast all such votes for a single
nominee or may distribute them between the nominees as the
stockholder chooses. This Proxy Statement solicits discretionary
authority to vote cumulatively, and the accompanying form of proxy
grants such authority.
ELECTION OF DIRECTORS
The Board recommends that the stockholders vote FOR, and unless
otherwise instructed, the persons named in the Proxy have indicated
that they intend to vote FOR the election of Daniel O. Skolness and
H.T. Ritchie, comprising the class of directors whose current terms
expire at the 1995 Annual Meeting, to serve as directors for a term
of three years, until the 1998 Annual Meeting of Stockholders and
until their successors are duly elected and qualified. In the event
of the death or disability of any of the candidates for director,
the Proxy will be voted for such other person or persons as the
Board of Directors may recommend. No stockholder may vote in person
or by proxy for more than two nominees at the Annual Meeting.
<PAGE>
Certain information about the (i) nominees, (ii) the other
current directors of the Company who will continue in office after
the Annual Meeting and (iii) the executive officers of the Company
is set forth below:
Nominees For Reelection.
Nominated
for Term
Name Age Position Expiring
H.T. Ritchie 51 Secretary and Director 1998
Daniel O. Skolness 46 Director 1998
Directors Who Will Continue in Office and Executive Officers.
Expiration
for Term as
Name Age Position Director
Stanley E. Larson 70 Chairman, President and Director 1997
John F. Chivers 56 Director 1996
Roger D. Skaer 56 Treasurer and Director 1997
Donald M. Wright 72 Director 1996
Raymond G. Friend 43 Executive Vice President and CFO
The directors of the Company are divided into three classes,
each holding office for a term of three years. One class of
directors is elected each year at the Annual Meeting of
Stockholders. Officers of the Company serve at the discretion of
the Board of Directors.
Set forth below are biographical summaries of the incumbent
directors, including the nominees, and the executive officers of
the Company.
Stanley E. Larson has been a director of the Company since
March 1980 and his current term as director expires at the Annual
Meeting of Stockholders in 1997. He has served as President of the
Company since June 1985 and is a member of the "Nominating"
Committee of the Board of Directors.
John F. Chivers has been a director of the Company since April
1993 and his current term as director expires at the Annual Meeting
of Stockholders in 1996. Mr. Chivers is a realtor and developer
from Detroit Lakes, Minnesota. He is a member of the "Nominating"
Committee of the Board of Directors.
H.T. Ritchie has been a director and the Secretary of the
Company since October 1987 and his current term as director expires
at the Annual Meeting of Stockholders in 1995. He has been
nominated by the Board for reelection at the 1995 Annual Meeting
for a three-year term, which will expire in 1998. For over five
years, Mr. Ritchie has served as President of the Ritchie
Corporation, a paving, sand and concrete production business
located in Wichita, Kansas. He is a member of the "Policy and
Compensation" Committee of the Board of Directors.
Roger D. Skaer has been a director and the Treasurer of the
Company from October 1987 until August 1993 when he resigned as
Treasurer. His current term as director expires at the Annual
Meeting of Stockholders in 1997. In December 1993 he was again
elected as Treasurer. Until retiring in 1992, he maintained a
dental practice in the Wichita area. He now manages personal
investments. He is a member of the "Budget and Audit" Committee of
the Board of Directors.
<PAGE>
Daniel O. Skolness has been a director of the Company since
December 1993 and his current term as director expires at the
Annual Meeting of Stockholders in 1995. He has been nominated by
the Board for reelection at the 1995 Annual Meeting for a three-year
term, which will expire in 1998. Mr. Skolness has been chief
financial officer of Skolness, Inc., a sugarbeet and grain business
of Glyndon, Minnesota, for over ten years. He is a member of the
"Policy and Compensation" and "Budget and Audit" Committees of the
Board of Directors.
Donald M. Wright has been a director of the Company since
October 1987 and his current term as director expires at the Annual
Meeting of Stockholders in 1996. For over six years he has managed
his personal investments. He is a member of the "Nominating" and
"Budget and Audit" Committees of the Board of Directors.
Raymond G. Friend has been the Controller of the Company since
June 1985 and Vice President and Chief Financial Officer since
April 1990. In 1995 Mr. Friend was elected Executive Vice President
and Chief Financial Officer of the Company. From March 1992 until
March 1993, Mr. Friend served as Chairman of the Clean Fuels
Development Coalition (CFDC), a national organization formed to
promote the commercial development and use of clean alternative
fuel sources. He continues to serve as executive director of the
CFDC and in March of 1995 was again elected Chairman of CFDC for a
one-year term. He also serves as President of the Kansas Ethanol
Association, an organization of ethanol producers which operate
plants in the state of Kansas.
No family relationships exist between or among the directors or
executive officers of the Company.
Committees
The Company has standing Budget and Auditing, Policy and
Compensation, and Nominating Committees. Each Committee has met at
least twice in the past fiscal year. All Committee members were
present at each Committee meeting.
The Budget and Audit Committee, consisting of Messrs. Skaer,
Wright, and Skolness, reviews the financial statements and budgets
of the Company and reviews the performance of and recommends
selection of the Company's independent auditors.
The Policy and Compensation Committee, consisting of Messrs.
Ritchie, and Skolness, reviews overall policies including
compensation policies of the Company, recommends modifications to
general policies and to compensation levels, and awards and grants
stock options.
The Nominating Committee, consisting of Messrs. Wright, Larson
and Chivers, recommends the nomination of prospective directors and
officers. The Nominating Committee will consider persons brought to
its attention by stockholders. Stockholders wishing to recommend
persons for consideration by the Nominating Committee as nominees
to the Company's Board of Directors can do so by writing to the
Secretary of the Company at 200 W. Douglas, Suite #820, Wichita,
Kansas 67202, giving such person's name, biographical data and
qualifications. Any such recommendation should be accompanied by a
written statement from the person recommended giving consent to be
named as a nominee and, if nominated and elected, to serve as a
director.
Attendance At Board Meetings
Since the last Annual Meeting of Stockholders, five meetings
were held by the Board of Directors. All incumbent directors have
attended all of the Board of Directors meetings since their
election, except that H.T. Ritchie was unable to personally attend
the Special Board Meeting held on August 26, 1995.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Company's voting securities as of September 29, 1995 by (i) each
director of the Company, (ii) each Named Officer, as defined in
"Executive Compensation", and (iii) all directors and executive
officers of the Company as a group. Unless otherwise noted, each
person has sole voting and investment power with respect to the
shares of voting securities beneficially owned by such person.
<TABLE>
<CAPTION>
Number Ownership
Name of Beneficial Owner of Shares Percentage (1)
<S> <C> <C>
Stanley E. Larson (2) 569,028 3.1%
John F. Chivers (3) 180,000 *
H.T. Ritchie (4) 439,058 2.4%
Roger D. Skaer (5) 663,165 3.6%
Daniel O. Skolness (6) 334,706 1.8%
Donald M. Wright (7) 453,758 2.5%
Raymond G. Friend (8) 441,275 2.4%
All directors and executive
officers as a group (7
persons) 3,080,990 16.9%
<FN>
* Less than 1%.
(1) Assumes exercise of options to purchase Common Stock granted to
present and former officers, directors, and employees representing
2,259,421 shares of Common Stock for total outstanding shares of Common
Stock of 18,255,710.
(2) Includes options to purchase 455,428 shares of Common Stock which
are exercisable currently or within 180 days. These include 66,667
(50,000 prior to the February 22, 1995 stock split) freestanding options
to purchase Common Stock which are not subject to a company stock
option plan and which were issued at $5.3475 ($7.13 prior to the
February 22, 1995 stock split) which represents fair market value on
September 13, 1994.
(3) Consists of options to purchase 180,000 shares of Common Stock
which are exercisable currently or within 180 days.
(4) Includes options to purchase 288,000 shares of Common Stock which
are currently exercisable; 6,694 shares of Common Stock as to which
Mr. Ritchie shares investment and voting power; and 1,152 shares which
are held as custodian for a minor child.
(5) Includes options to purchase 302,393 shares of Common Stock which
are exercisable currently or within 180 days.
(6) Includes options to purchase 144,000 shares of Common Stock which
are currently exercisable; 19,970 shares held as custodian for a minor
child; and 24,373 shares and 129,600 options to purchase shares held by
the estate of Arthur Skolness, for which Daniel O. Skolness acts as
executor.
(7) Includes options to purchase 302,400 shares of Common Stock which
are exercisable currently or within 180 days.
(8) Includes options to purchase 345,600 shares of Common Stock which
are exercisable currently or within 180 days.
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain individual compensation
information for the Company's President and for the Company's
executive officers whose total salary and bonus for fiscal 1995
exceeded $100,000 (the "Named Officers"). The Company granted no
restricted stock awards or stock appreciation rights and did not
make any long-term incentive plan payouts during the fiscal years
indicated.
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Fiscal Annual Compensation Awards
Name and Principal Position Year Salary ($) Bonus ($) Options (#)(3) Compensation(1)(2)($)
<S> <C> <C> <C> <C> <C>
Stanley E. Larson 1995 $123,600 $ 95,103 122,000 --
(Chairman of the Board and 1994 120,000 44,884 54,000 --
President) 1993 27,692 217,947 55,000 --
Raymond G. Friend 1995 123,600 95,103 72,000 $4,374
(Executive Vice President and 1994 120,000 44,884 54,000 4,200
Chief Financial Officer) 1993 82,369 166,559 55,000 2,883
David J. Vander Griend (4) 1995 121,773 39,539 72,000 2,499
1994 120,000 44,884 54,000 4,200
1993 82,369 166,559 55,000 2,883
<FN>
(1) All amounts represent employer matching contributions to the
Company's 401(k) Retirement Plan on behalf of the named
individuals.
(2) Does not include the value of perquisites and other personal
benefits because the aggregate amount of such compensation does
not exceed 10% of the total amount of annual salary and bonus for
any Named Officer.
(3) Not adjusted for the dilutive effect of the February 22, 1995
stock split.
(4) Former Vice President of Operations who resigned as Vice
President on January 19, 1995 and whose employment terminated
April 15, 1995.
</TABLE>
<PAGE>
Option Grants in Fiscal Year Ended June 30, 1995
The following table sets forth information concerning stock
options granted to the Named Employee Officers during fiscal 1995
under the Company's 1992 Stock Option Plan. The Company granted no
stock appreciation rights during fiscal 1995.
<TABLE>
<CAPTION>
% of Total Market Potential Realizable Value
Options Price on at Assumed Annual Rates
Granted to Exercise or Date of of Stock Price Appreciation
Options Employees in Base Price Grant Expiration for Option Term
Name Granted (#) Fiscal Year ($/Sh)(5) ($/Sh)(1)(5) Date 5% ($) 10%($) 0%($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stanley E. Larson 72,000(2)(3)(4) 23.2% $8.3438 $8.3438 12/09/04 $300,377 $600,754 $0
66,667(2)(3)(4) 16.6% $5.3475 $5.3475 9/22/04 $178,251 $356,501 $0
Raymond G. Friend 72,000(2)(3)(4) 23.2% $8.3438 $8.3438 12/09/04 $300,377 $600,754 $0
David J. Vander Griend 72,000(2)(3)(4)(6) 23.2% $8.3438 $8.3438 12/09/04 $300,377 $600,754 $0
<FN>
(1) Based upon the last reported sales price on the NASDAQ
National Market System on the date of grant.
(2) Options are currently exercisable.
(3) The quantity of these options has been adjusted to allow for
the dilutive effect of the stock split which occurred on February
22, 1995.
(4) These options were granted pursuant to the "1992 Stock Option
Plan".
(5) The exercise price and the market price on the date of the
grant were adjusted to allow for the dilutive effect of the stock
split which occurred on February 22, 1995.
(6) Former Vice President of Operations who resigned as Vice
President on January 19, 1995 and whose employment terminated
April 15, 1995.
</TABLE>
<PAGE>
Aggregated Option Exercises in Fiscal Year Ended June 30, 1995
and Fiscal Year-End Option Values
The following table sets forth information concerning stock
options exercised during, and held at the close of, fiscal 1995 by
the Named Employee Officers. The Named Officers did not exercise
during, or hold at the close of, such fiscal year any stock
appreciation rights.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Shares Options at Fiscal Options at
Acquired on Value Year-End(#) Fiscal Year-
Name Exercise(#)(1) Realized($) Exercisable/Unexercisable End($)
<S> <C> <C> <C> <C>
Stanley E. Larson 208,361 653,695 247,067/0 479,232
Raymond G. Friend 30,925 201,893 314,675/0 707,163
<FN>
(1) Adjusted to reflect for the effect of the February 22, 1995
stock split.
</TABLE>
Director Compensation
Until July 1, 1993 the Company traditionally did not pay cash
compensation for serving on the Board of Directors or on a
committee of the Board of Directors. As compensation for serving as
a director and serving on committees of the Board of Directors for
fiscal years 1994 and 1995, on December 10, 1993, the Company
adopted a three year plan to grant to each of the six incumbent
directors options to purchase 25,000 shares of Common Stock at an
exercise price equal to $9.63 per share, the market closing price
on such date. Such options expire 10 years from the date of grant
if not previously exercised. Due to antidilutive features of the
Company's stock options, the quantity of options granted or
scheduled to be granted to each optionee, in each year, have
increased to 72,000. As a result of stock splits which have
occurred through 1995 the exercise price of all options which were
issued prior to any stock splits have been reduced proportionately
by the dilutive effect of the splits.
Beginning on July 1, 1993, directors who are not employees of the
Company are paid (i) $1,000 for each meeting of the Board of
Directors attended and (ii) $500 for each meeting of a committee of
the Board of Directors attended. For fiscal year 1995, each of the
five current nonemployee directors of the Company were granted
options to purchase 54,000 shares (prior to the February 22, 1995
stock split) of Common Stock at an exercise price equal to the
market closing price on the date of such grants. Mr. Larson, the
only current employee director, is not eligible to receive cash
compensation for serving as a director or for serving on any
committees of the Board of Directors, but for the 1995 fiscal year
did receive options to purchase 54,000 shares of Common Stock
(adjusted to 72,000 after the February 22, 1995 stock split) at an
exercise price equal to the market closing price on the date of
such grants. These options expire 10 years from the date of grant
if not previously exercised.
The Company also reimburses directors for reasonable expenses
incurred in connection with their attendance at meetings, including
committee meetings, of the Board of Directors.
<PAGE>
Employment Agreements
On April 1, 1993, the Company entered into employment agreements
(the "Employment Agreements") with Messrs. Stanley E. Larson, and
Raymond G. Friend (the "Employees"). (Unless otherwise indicated,
the provisions of the Employment Agreements are substantially
similar.) Each of the Employment Agreements was for a four-year
term. On April 1, 1995, these employment agreements were extended
for a period of five years from that date, to coincide with the
terms of additional employment agreements entered into by the
Company with other key management employees.
The Employment Agreements provide, with certain exceptions, that
the Employees will not compete with the Company for the two-year
period following termination of their employment. If the Employee
is terminated for cause or if the Employee voluntarily resigns, the
Company is not obligated to continue base salary or bonus payments
beyond payments which were incurred prior to such termination. Upon
termination due to death or permanent disability, each Employment
Agreement provides for payment of 100% of the Employee's base
salary at the time of termination, plus 50% of the Employee's most
recent bonus. In the event the Company terminates the Employee
without cause, the Company must continue to pay, for the remainder
of the term of the Agreement, the Employee's full base salary at
the time of termination plus (i) a bonus amount equal to the
Employee's most recently received annual bonus, and (ii) the costs
for the Employee's continued participation in all Company benefit
plans. In the event of a termination of the Employee following a
Change of Control (as defined in the Employment Agreements), the
terminated Employee will continue to receive his base salary and
bonus payments for the remainder of the term of the Agreement, and
any unvested stock options of such Employee shall vest and become
immediately exercisable.
Compensation under the Employment Agreements consists of (i) a
current minimum base salary of $123,600 for Mr. Larson and for Mr.
Friend, which is to be increased by 3% per year as a cost of living
adjustment and which may be increased by the Board of Directors of
the Company based on merit, (ii) participation in an executive
officer and key employee bonus pool equal to an aggregate of 5 1/2%
of the Company's net income, and (iii) stock options to be granted
under the Company's 1992 Stock Option Plan.
Report of the Compensation Committee with Respect to Executive
Compensation
The Company applies a consistent philosophy to compensation for
all employees, including senior management. This philosophy is
based on the premise that the achievements of the Company result
from the coordinated efforts of individuals working toward common
objectives. The Company strives to achieve those objectives through
teamwork that is focused on meeting the expectations of customers,
stockholders and employees. Prior to and including fiscal 1995, the
ultimate responsibility for administering the Company's
compensation philosophy and overseeing the evaluation process as it
relates to salary and bonus determinations has been the
responsibility of the Board of Directors as a group, with the
responsibility of the "Committee" being to study compensation
issues and make recommendations to the Board of Directors.
Executive Compensation Philosophy. The goals of the Company's
executive compensation program are to align compensation with
business objectives and performance, and to enable the Company to
attract, retain and reward executive officers who contribute to the
long-term success of the Company. The Company's compensation
program for executives is based on the following principles:
* The Company attempts to compensate competitively.
The Company is committed to providing a compensation program
aimed at attracting and retaining the best people in the
industry. To ensure that compensation is competitive, the Company
periodically compares its compensation practices with those of
comparable companies and sets its compensation parameters based
on this review.
<PAGE>
* The Company compensates sustained performance.
Executive officers are rewarded based upon corporate
performance and individual performance. Corporate performance
is evaluated by reviewing the extent to which strategic and
business plan goals are met, including such factors as
operating profit and performance relative to competitors.
Individual performance is evaluated by reviewing organizational and
management development progress against set objectives.
* The Company strives for fairness in the administration of
compensation.
The Company attempts to apply its compensation philosophy
uniformly. The Company strives to achieve a balance of the
compensation paid to a particular individual and the compensation
paid to other executives both inside the Company and at
comparable companies.
The Board of Directors, partially on the basis of information
obtained from the underwriter of the Company's 1993 stock
offering, determined the compensation levels and contract terms for
the Employment Agreements.
Commencing with fiscal 1994, the Company's process of assessing
executive performance was as follows:
1. At the beginning of the annual performance cycle, the Chief
Executive Officer and the Committee set objectives and key
goals for the Company's officers.
2. The Chief Executive Officer and the Committee give each
officer ongoing feedback on performance.
3. At the end of the annual performance cycle, the Chief
Executive Officer and the Committee evaluate the officer's
accomplishment of objectives and attainment of key goals.
4. The accomplishment of objectives and attainment of key
goals affect the Chief Executive Officer's and the
Committee's recommendations to the Board of Directors on salary
increases and, if applicable, stock options.
Executive Compensation Vehicles. The Company utilizes a
compensation program to attract and retain key executives, enabling
it to improve products, motivate technological innovation, foster
teamwork and adequately reward executives, all with the goal of
enhancing stockholder values. The annual cash-based compensation
for executives consists of a base salary subject to increases at
the discretion of the Company. Salaries are reviewed on an annual
basis and may be changed at that time based on (i) information
derived from the evaluation procedures described above, (ii) a
determination that an individual's contributions to the Company
have increased (or decreased), and (iii) changes in competitive
compensation levels. The Company also makes available to executives
incentive bonuses described above under "Employment Agreements"
based on overall Company performance.
The Company also has a Long-Term Savings and Deferred Profit
Sharing Plan (the "401(k) Plan"), adopted in 1991 to allow
participants to defer compensation pursuant to 401(k) of the
Internal Revenue Code. All employees of the Company, including
executives, are eligible to participate in the 401(k) Plan provided
certain qualifications are met. In addition to amounts which
participants may elect to contribute to the 401(k) Plan, the
Company makes "matching" contributions to the 401(k) Plan allocated
to all participants. Payments of benefits accrued for 401(k) Plan
participants will be made upon retirement or upon termination of
employment prior to retirement provided certain conditions have
been met by the employee prior to termination.
<PAGE>
Long-term incentives are intended to be provided through stock
options specified in the Employment Agreements and through the
possible grant of additional stock options under the 1992 Stock
Option Plan or future stock option plans. The objective of
aligning executives' long range interests with those of the
stockholders may be met by providing the executives with the
opportunity to build meaningful stake in the Company.
Chief Executive Officer and Other Officer Compensation. The
compensation levels paid to Stanley E. Larson as President and
Chief Executive Officer of the Company, Raymond G. Friend as
Executive Vice President and Chief Financial Officer, were
established pursuant to an Employment Agreement and other related
agreements, effective April 1, 1993 and renewed April 1, 1995 (see
"Employment Agreements" above). These Agreements were approved by
the entire Board of Directors after careful consideration.
Compensation to officers is provided by base salary, incentive
bonuses, and stock option awards.
Base Salary. An executive's base salary is determined by an
assessment of his or her sustained performance, advancement
potential, experience, responsibility, scope and complexity of the
position, current salary in relation to the range designated for
the job and salary levels for comparable positions at peer
companies.
Bonuses. Payments under the Company's bonus incentive plan are
tied to the Company's level of achievement of annual earnings. This
creates a direct link between the Company's profitability and
executive officer pay.
Long-Term Incentives. The Company's overall long-term
compensation philosophy is that long-term incentives should be
directly related to the creation of stockholder value, thus
providing a strong link between management and stockholders. In
support of this philosophy, the Company has awarded to its
executive officers stock options.
Stock Option Awards. Stock options encourage and reward executive
officers for creating stockholder value as measured by stock price
appreciation. Stock options are currently awarded at an exercise
price equal to the fair market value of the stock on the date of
grant, and, therefore, only have value for the executive officers
if the price of the Company's stock appreciates in value from the
date the stock options are granted. Stockholders also benefit from
such stock price appreciation.
Stock options are awarded annually consistent with the Company's
objective to provide (i) a long-term equity interest in the
Company, and (ii) an opportunity for a greater financial reward if
long-term performance is sustained. The base number of options
granted to each executive officer falls within a pre-determined
range, set and approved by the Board of Directors when implementing
the Company's Stock Option Plans. Individual grants which are
awarded in addition to the base options are dependent upon the
Company's future business plans and the executive officer's ability
to positively impact those plans, the executive officer's position
and level of responsibility within the Company, and an evaluation
of the executive officer's performance.
Compensation Committee Interlocks and Insider Participation.
For fiscal 1995, Messrs. H.T. Ritchie (Committee Chairman), and
Daniel O. Skolness comprised the Policy and Compensation Committee
of the Board of Directors. Mr. Ritchie is currently the Secretary
of the Company.
As members of the Policy and Compensation Committee of the Board
of Directors of the Company, Messrs. Ritchie and Skolness make
recommendations to the entire Board of Directors regarding the
compensation for the executive officers and directors of the
Company, including those compensation arrangements described in the
"Executive Compensation" portion of this proxy.
Policy and Compensation Committee
H.T. Ritchie, Chairman
Daniel O. Skolness
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below compares the yearly
percentage change in the cumulative total stockholder return on the
Company's Common Stock against the total cumulative return of the
S&P 500 Stock Index and the Peer Group for the Company (Midwest
Grain Products, Archer-Daniels and Methenex Corp.) for the fiscal
years 1991, 1992, 1993, 1994 and 1995 ending June 30. All
calculations assume reinvestment of dividends.
TOTAL RETURN TO STOCKHOLDERS
(assumes $100 invested on June 30, 1991)
[GRAPH containing the following data:
<TABLE>
<CAPTION>
6/91 6/92 6/93 6/94 6/95
<S> <C> <C> <C> <C> <C>
High Plains Corp $ 100 $ 146.04 $ 212.58 $ 251.79 $ 206.83
S&P 500 Index 100 124.76 121.19 119.51 146.54
Peer Group 100 109.79 130.60 171.93 110.98
</TABLE>
<PAGE>
ITEM 2 ADOPTION OF EMPLOYEE STOCK PURCHASE PLAN
In absence of instructions to the contrary, proxies solicited by
the Board of Directors will be voted for the adoption of an
Employee Stock Purchase Plan for key management employees of the
Company. This plan is designed to provide certain employees
designated by the Board of Directors, and which the Board feels are
in a position to directly affect the profitability of the Company,
with an opportunity to build a meaningful investment in the
Company, thereby promoting a long-term relationship with the
Company, and an incentive to encourage Company profitability.
Additionally, the plan would generate additional operating capital
for the Company through the purchase of shares from authorized but
unissued treasury stock held by the Company.
Existing Plan
The proposed plan would compliment the existing Employee Stock
Purchase Plan for all other employees of the Company which was
authorized by the Board in its meeting on April 6, 1995. The
existing plan will run for three years, and during each of these
three years, allows Company employees to purchase up to 100 shares
of High Plains Corporation Common Stock for each year the employee
has been with the Company. The stock may be purchased at 50% of the
lowest closing market price the stock achieves within a designated
window of time, but must be paid for by the employee over a 5 year
period of payroll deductions, and does not vest until completion of
the 5 year period, and the completion of all payments. Employees
will be eligible to participate in one plan only, and may not
participate in both plans.
Summary of Proposed Plan
The Board currently intends to offer participation in this plan
to eleven employees in key areas of company management, with a
combined total of approximately 63 years of employment with the
Company. The significant provisions of the plan are summarized as
follows:
(a) ELIGIBLE EMPLOYEES: This plan will be offered only to
employees which are designated from time to time by the Board of
Directors as key management employees.
(b) PRICE: Participating Employees will be able to elect to
purchase High Plains Common Stock at a price equal to 50% of the
lowest market value (the closing price bid for the Common Stock)
which the stock achieved between May 1 and August 1 for each year
in which the employee makes an election to purchase.
(c) SHARES AVAILABLE: These designated employees shall be
entitled to purchase 1,000 shares during each year of the plan,
plus an additional 1,000 shares for each year of employment with
the Company completed prior to August 1 of the year in which the
election is made. The aggregate number of shares which may be
purchased under the plan shall not exceed 250,000 subject to
adjustment for stock splits or dividends declared by the Board of
Directors.
(d) TERM: If approved by Shareholders of the Company, this
Employee Stock Purchase Plan shall be in effect as of August 1,
1995, and for a period of three years thereafter.
(e) PAYMENT TERMS AND VESTING: Payment for this stock may be
made only through biweekly payroll deductions over a period of five
years, at a rate of 20% of the total purchase cost per year,
divided by the 26 pay periods each year. Prepayments will not be
available except for employees who are also officers of the
Company. The stock ownership will vest in the employee's name only
upon the completion of the five year payment schedule. There will
be no partial vesting and no prepayment options, except that any
employee officer who has achieved ten continuous years of
employment with High Plains Corporation shall have the option to
pre-pay any balance due for shares purchased pursuant to this plan,
at which time the Company will immediately transfer said shares to
the employee. Excluding only this exception for employee officers
with ten years of service, even in the event of the death or
termination of
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the employee, no shares will be transferred or
delivered to the employee or his estate until the completion of the
five year period from the date the first payment for the stock in
question is withheld from the employee's wages. If approved by the
stockholders, payroll deductions will commence in December for the
1st year of the plan, and in August for the 2nd and 3rd years of
the plan.
Vote Required for Approval
Approval of this plan will require the affirmative vote of a
majority of the shares of the Common Stock outstanding as of the
Record Date. The Board of Directors has approved the proposed plan
and recommends that the stockholders vote FOR the proposed
amendment.
ITEM 3 SELECTION OF AUDITORS
Proxies solicited by the Board of Directors will be voted for
ratification of the appointment of Allen, Gibbs & Houlik, L.C. as
the Company's independent auditors for the 1996 fiscal year in the
absence of instructions to the contrary.
The audit of the Company for the year ended June 30, 1995, was
conducted by Allen, Gibbs & Houlik, L.C. Representatives of such
firm are expected to be present at the Annual Meeting of
Stockholders to make a statement if they desire to do so and to
answer appropriate questions. The Board of Directors recommends
that the stockholders vote FOR ratification of its appointment of
Allen, Gibbs & Houlik, L.C.
OTHER INFORMATION
Neither the Board of Directors nor management knows of any other
matters to be presented at the Annual Meeting of Stockholders.
However, if any other matter properly comes before the meeting, the
persons named in the enclosed Proxy will vote in accordance with
their judgement upon such matters. Stockholders who do not expect
to attend in person are urged to execute and promptly return the
enclosed form of Proxy.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders to be presented at the Company's 1996
Annual Meeting of Stockholders must be received at the Company's
executive offices no later than July 2, 1996 for inclusion in the
1996 Proxy Statement.
By Order of the Board of Directors
Stanley E. Larson
Chairman of the Board and President
Wichita, Kansas
October 6, 1995
<PAGE>
PROXY HIGH PLAINS CORPORATION
200 W. Douglas, Suite #820, Wichita, KS 67202
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John F. Chivers and Donald M. Wright
as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all
shares of common stock of High Plains Corporation as held of record
by the undersigned on September 29, 1995, at the Annual Meeting of
Stockholders to be held November 17, 1995, or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR THE NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE
CONTRARY BELOW).
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.
H.T. RITCHIE STANDS FOR ELECTION TO A THREE YEAR TERM.
DANIEL O. SKOLNESS STANDS FOR ELECTION TO A THREE YEAR TERM.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE
SPACE PROVIDED BELOW.)
<PAGE>
2. TO AMEND THE ADOPTION OF AN EMPLOYEE STOCK PURCHASE PLAN FOR KEY
MANAGEMENT EMPLOYEES OF THE COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO RATIFY THE APPOINTMENT OF ALLEN, GIBBS & HOULIK, L.C. AS THE
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,2,3, AND 4.
Please sign exactly as name appears below. When shares are held by
join tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.
Dated: _____________________, 1995
__________________________________
Signature of Shareholder
__________________________________
Signature of Shareholder
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY, USING THE ENVELOPE PROVIDED
