HIGH PLAINS CORPORATION
200 W. Douglas, Suite #820
Wichita, Kansas 67202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 15, 1996
The Annual Meeting of Stockholders of High Plains Corporation
(the "Company") will be held at the Broadview Hotel, 400 W.
Douglas, Wichita, Kansas, in the Crystal Ballroom, on the 15th day
of November, 1996 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 1999.
2. To ratify the appointment of Allen, Gibbs & Houlik, L.C.
as the independent public accountants for the Company.
3. 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
30, 1996 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 30, 1996
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 15, 1996
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 15, 1996, 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 18,
1996.
The Company had outstanding 15,856,111 shares of Common Stock,
par value $.10 per share as of September 30, 1996, 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.
ITEM 1 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 John F. Chivers and
Donald M. Wright, comprising the class of directors whose current
terms expire at the 1996 Annual Meeting, to serve as directors for
a term of three years, until the 1999 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.
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<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
------------------- --- -------- -----------
John F. Chivers 57 Director 1999
Donald M. Wright 73 Director 1999
Directors Who Will Continue in Office and Executive Officers.
Expiration
for Term as
Name Age Position Director
------------------- --- --------------------------------- -----------
Stanley E. Larson 71 Chairman, President and Director 1997
H.T. Ritchie 52 Secretary and Director 1998
Roger D. Skaer 57 Treasurer and Director 1997
Daniel O. Skolness 47 Director 1998
Raymond G. Friend 44 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. He has been nominated by the Board
for reelection at the 1996 Annual Meeting for a three-year term,
which will expire in 1999. 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 1998. For over seven
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.
2
<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 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. He has been nominated by the Board
for reelection at the 1996 Annual Meeting for a three-year term,
which will expire in 1999. For over seven 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, and again from March 1995 to March 1996, 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. 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
During the fiscal year ended June 30, 1996 six meetings were
held by the Board of Directors. All incumbent directors have
attended all of the Board of Directors meetings held this fiscal
year, except that John F. Chivers was unable to attend the Special
Board Meeting held on April 12, 1996, and H.T. Ritchie was unable
to attend the Special Board Meeting held on August 26, 1995.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of
the Company's Common Stock as of September 30, 1996 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.
Number Ownership
Name of Beneficial Owner of Shares Percentage (1)
---------------------------------- ----------- --------------
Stanley E. Larson (2) 449,495 2.5%
John F. Chivers (3) 180,000 1.0%
H.T. Ritchie (4) 424,558 2.4%
Roger D. Skaer (5) 603,693 3.4%
Daniel O. Skolness (6) 165,751 0.9%
Donald M. Wright (7) 329,459 1.8%
Raymond G. Friend (8) 501,167 2.8%
All directors and executive
officers as a group (7 persons) 2,654,123 14.8%
(1) Assumes exercise of options which were exercisable at June 30,
1996 to purchase Common Stock granted to present and former officers,
directors, and employees representing 2,074,846 shares of Common Stock
for total outstanding shares of Common Stock of 17,930,957.
(2) Includes options to purchase 409,197 shares of Common Stock which
are exercisable currently or within 180 days. Also included are
10,436 options and 1,564 shares acquired under the Company's Employee
Stock Purchase Plan.
(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 273,600 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 and 4,988 shares held as custodian for a
minor child.
(7) Includes options to purchase 273,600 shares of Common Stock which
are exercisable currently or within 180 days.
(8) Includes options to purchase 365,056 shares of Common Stock which
are exercisable currently or within 180 days. Also included are 9,477
options and 1,523 shares acquired under the Company's Employee Stock
Purchase Plan.
4
<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 1996 exceeded $100,000 (the "Named Officers"). The Company
granted no restricted stock awards or stock appreciation rights and
did not make any long-term incentive plan payouts during the fiscal
years indicated.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
--------------
Annual Compensation Securities
Fiscal --------------------- Underlying All Other
Name and Principal Position Year Salary($) Bonus ($) Options (#)(3) Compensation(1)(2)($)
- -------------------------------- ------ --------- --------- -------------- ---------------------
<S> <C> <C> <C> <C> <C>
Stanley E. Larson 1996 $ 128,689 $ 277,757 338,761(4) --
(Chairman of the Board and 1995 123,600 95,103 138,667 --
President) 1994 120,000 44,884 72,000 --
Raymond G. Friend 1996 $ 128,689 $ 277,757 150,600(5) $ 4,510
(Executive Vice President and 1995 123,600 95,103 72,000 4,374
Chief Financial Officer) 1994 120,000 44,884 72,000 4,200
<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) Numbers of options has been adjusted for the dilutive effect
of the February 22, 1995 stock split.
(4) 316,761 of these options were issued either to replace
options previously exercised or were issued as "re-load" options
for options currently exercised, as provided for under the 1995
stockholder approved amendments to the "1992 Stock Option Plan."
These options do not have "re-load" rights like options issued
under the Company's "1992 Stock Option Plan."
(5) 129,600 of these options were issued either to replace
options previously exercised or were issued as "re-load" options
for options currently exercised, as provided for under the 1995
stockholder approved amendments to the "1992 Stock Option Plan."
These options do not have "re-load" rights like options issued
under the Company's "1992 Stock Option Plan."
</TABLE>
5
<PAGE>
Option Grants in Fiscal Year Ended June 30, 1996
<TABLE>
<CAPTION>
The following table sets forth information concerning stock
options granted to the Named Employee Officers during fiscal 1996
under the Company's 1992 Stock Option Plan and the Employees Stock
Purchase Plan. The Company granted no stock appreciation rights
during fiscal 1996.
Potential Realizable Value
% of Total Market at Assumed Annual Rates
Options Price on of Stock Price Appreciation
Granted to Exercise or Date of for Option Term
Options Employees in Base Price Grant Expiration -------------------------------
Name Granted (#)(2) Fiscal Year ($/Sh) ($/Sh)(1) Date 5%($) 10%($) 0%($)
- ------------------ -------------- ------------ ----------- --------- ---------- -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stanley E. Larson 208,361(3) 19.6% $5.25 $5.25 8/03/05 $707,760 $1,867,324 $ 0
22,000(3) 2.0% $5.25 $5.25 12/09/02 $ 51,029 $ 124,242 $ 0
86,400(3) 8.1% $5.25 $5.25 12/09/02 $200,408 $ 487,933 $ 0
10,000(3) 0.9% $3.50 $3.50 5/07/06 $ 22,645 $ 59,746 $ 0
12,000(4) 1.1% $2.50 $4.375 2/06/01 $ 44,876 $ 63,878 $22,500
Raymond G. Friend 30,925(3) 2.9% $5.25 $5.25 8/03/05 $105,046 $ 277,148 $ 0
12,275(3) 1.2% $5.25 $5.25 5/10/98 $ 9,478 $ 20,302 $ 0
86,400(3) 8.1% $5.25 $5.25 12/09/02 $200,408 $ 487,933 $ 0
10,000(3) 0.9% $3.50 $3.50 5/07/06 $ 22,645 $ 59,746 $ 0
11,000(4) 1.1% $2.50 $4.375 2/06/01 $ 41,051 $ 58,555 $20,625
<FN>
(1) Based upon the last reported sales price on the NASDAQ
National Market System on the date of grant.
(2) All options are exercisable currently or within 180 days.
(3) These options were granted pursuant to the "1992 Stock Option
Plan", either as original option awards, or as re-load options
authorized by the November 1995 Amendments to the Company's 1990 &
1992 Stock Option Plans.
(4) These options were granted pursuant to the Company's Employee
Stock Purchase Plan.
</TABLE>
6
<PAGE>
Aggregated Option Exercises in Fiscal Year Ended June 30, 1996
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
The following table sets forth information concerning stock
options exercised during, and held at the close of, fiscal 1996 by
the Named Employee Officers. The Named Officers did not exercise
during, or hold at the close of, such fiscal year any stock
appreciation rights.
Value of
Number of Unexercised
Unexercised in-the-Money
Shares Options at Fiscal Options at
Acquired on Value Year-End(#) FiscalYear-
Name Exercise(#) Realized($) Exercisable/Unexercisable End($)
------------------- ----------- ----------- ------------------------- ------------
<C> <C> <C> <C> <C>
Stanley E. Larson 175,067 422,703 399,197/10,000 $ 18,858
Raymond G. Friend 98,675 445,754 355,056/10,000 $ 55,724
</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 shareholder approved 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 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 1996, 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.
The Company also reimburses directors for reasonable expenses
incurred in connection with their attendance at meetings, including
committee meetings, of the Board of Directors.
7
<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 $131,127 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 6 5/8%
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.
8
<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.
9
<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 under the 1992 Stock Option
Plan 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. The Company has also adopted an Employee Stock
Purchase Plan for key management employees. This plan was approved
by majority vote of shareholders at the Company's Annual Meeting of
Shareholders on November 17, 1995. Both Mr. Larson and Mr. Friend
are eligible to participate in this plan. Under the plan, employees
of the Company are entitled to purchase a certain number of shares
of stock (based primarily on years of service to the Company) at a
discounted value. Stockholders also benefit from such stock price
appreciation.
Stock options are awarded annually periodically 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.
10
<PAGE>
Securities and Exchange Commission Filing Obligations.
Under the securities laws of the United States, the Company's
directors, executive officers, and any persons holding more than
ten percent of the Company's securities are required to report to
the Securities and Exchange Commission and to the NASDAQ National
Market System by a specified date his or her ownership of or
transactions in the Company's securities. To the Company's
knowledge, based solely on information filed with the Company, all
of these requirements have been satisfied, except that Daniel O.
Skolness failed to timely file one Form 4 reflecting a total of 20
transactions in the month of June 1996. Nine of these transactions
involved an estate for which Mr. Skolness is the executor. The
remaining transactions involved Mr. Skolness's minor children. A
Securities and Exchange Commission Form 5 reflecting these
transactions was timely filed in August 1996.
Compensation Committee Interlocks and Insider Participation.
For fiscal 1996, 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
11
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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 1992, 1993, 1994, 1995 and 1996 ending June 30. All
calculations assume reinvestment of dividends.
TOTAL RETURN TO STOCKHOLDERS
(assumes $100 invested on June 30, 1991)
12
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ITEM 2 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 1997 fiscal year in the
absence of instructions to the contrary.
The audit of the Company for the year ended June 30, 1996, 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 1997
Annual Meeting of Stockholders must be received at the Company's
executive offices no later than July 2, 1997 for inclusion in the
1997 Proxy Statement.
By Order of the Board of Directors
Stanley E. Larson
Chairman of the Board and President
Wichita, Kansas
October 17, 1996
13
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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 H. T. Ritchie and Daniel O.
Skolness 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 30, 1996, at the Annual Meeting
of Stockholders to be held November 15, 1996, or any adjournment thereof.
This proxy revokes all prior proxies given by the undersigned.
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.
JOHN F. CHIVERS STANDS FOR ELECTION TO A THREE YEAR TERM.
DONALD M. WRIGHT 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.)
2. TO RATIFY THE APPOINTMENT OF ALLEN, GIBBS & HOULIK, L.C. AS
THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
<PAGE>
(Continued from reverse side)
3. 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,
AND 3.
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: ________________________________, 1996
______________________________________________
Signature of Shareholder
______________________________________________
Signature of Shareholder
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENVELOPE PROVIDED
