SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 1-8490
ALAMCO, INC.
(Exact name of registrant as specified in its charter)
Delaware 55-0615701
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
200 West Main Street, Clarksburg, WV 26301
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (304) 623-6671
--------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
The number of shares outstanding of each of the registrant's classes of
common stock as of August 1, 1995, is set forth below:
Class of Stock Number of Shares Outstanding
Common Stock, $.10 par value 4,690,606
PART I. Financial Information Pages
Item 1. Financial Statements
Condensed Consolidated Statement of Income . . . . . . . . . . 3
for the three and six months ended June 30, 1995 and 1994
Condensed Consolidated Balance Sheet as of . . . . . . . . . 4 - 5
June 30, 1995 and December 31, 1994
Condensed Consolidated Statement of Cash Flows . . . . . . . . 6
for the six months ended June 30, 1995 and 1994
Condensed Consolidated Statement of Stockholders' . . . . . . 7
Equity for the six months ended June 30, 1995 and 1994
Notes to the Condensed Consolidated Financial . . . . . . . 8 - 9
Statements
Item 2. Management's Discussion and Analysis of . . . . . . . . . . 10 - 13
Financial Condition and Results of Operations
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 14
Signature Page . . . . . . . . . . . . . . . . . . . . . . . 15
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
1995 1994 1995 1994
---- ---- ---- ----
Revenues:
Gas and oil sales $3,048 $2,850 $6,059 $5,658
Well tending income 287 317 536 824
Other 195 41 395 96
------ ------ ------ ------
Total revenues 3,530 3,208 6,990 6,578
------ ------ ------ ------
Expenses:
Operating 1,609 1,309 3,170 2,602
General & administrative 781 683 1,558 1,333
Depreciation, depletion &
amortization 1,029 771 2,045 1,501
Interest 332 1 631 19
------ ------ ------ ------
Total expenses 3,751 2,764 7,404 5,455
------ ------ ------ ------
Income (loss)
from operations (221) 444 (414) 1,123
Other nonoperating income,
net 50 63 114 97
------ ------ ------ ------
Income (loss) before
income taxes (171) 507 (300) 1,220
Income tax (benefit)
provision (96) 186 (123) 437
------ ------ ------ -------
Net income (loss) ($75) $ 321 ($177) $ 783
====== ====== ====== ======
Net income (loss) per share ($0.02) $0.07 ($0.04) $0.17
===== ===== ===== =====
Weighted average number of
shares outstanding 4,677,257 4,643,783 4,665,385 4,641,620
========= ========= ========= =========
June 30, December 31,
1995 1994
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,935 $ 2,632
Accounts receivable 2,636 2,693
Due from partnerships and programs 172 140
Inventories and other current assets 419 428
------ ------
Total current assets 5,162 5,893
------ ------
Property and equipment:
Gas and oil producing properties
(Successful Efforts Method) 73,399 71,782
Other property and equipment 5,476 5,270
------ -------
78,875 77,052
Less accumulated depreciation,
depletion and amortization 30,136 28,487
------- -------
48,739 48,565
Other assets 1,530 1,600
------- -------
Total assets $55,431 $56,058
======= =======
(Continued)
June 30, December 31,
1995 1994
---- ----
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 73 $ 106
Accounts payable 524 1,325
Accrued expenses and other 1,144 1,398
Due working interest and royalty owners 1,197 1,064
Deferred revenue 904 1,165
------- -------
Total current liabilities 3,842 5,058
------- -------
Long-term debt and capital lease obligations 14,193 12,889
Due working interest and royalty owners 509 888
Deferred revenue 149 333
Deferred taxes 7,888 8,011
Other long-term liabilities 422 404
------- -------
Total liabilities 27,003 27,583
------- -------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $1.00 per share;
1,000,000 shares authorized; none issued
Common stock, par value $.10 per share;
15,000,000 and 7,500,000 shares
authorized, respectively;
4,745,413 and 4,712,713 shares
issued and outstanding, respectively
475 471
Additional paid-in capital 31,177 31,039
Accumulated deficit since
September 30, 1985
quasi-reorganization (3,024) (2,847)
-------- -------
28,628 28,663
Less: Treasury stock, at cost,
59,392 and 63,360 shares of
common stock, respectively 200 188
------- -------
Total stockholders' equity 28,428 28,475
-------- -------
Total liabilities and stockholders' equity $55,431 $56,058
======= =======
Six Months Ended
June 30,
-----------------
1995 1994
---- ----
Cash flows from operating activities:
Net income (loss) ($177) $ 783
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 2,045 1,501
Deferred taxes (123) 387
Gains on asset sales (22) (57)
Issuance of stock for employee benefits and
compensation expense 70 70
Other factors, net 2 6
Increase (decrease) in cash from changes in:
Accounts receivable 57 1,077
Due from partnerships and programs (32) (34)
Due working interest and royalty owners 133 (734)
Inventories and other current assets 9 (112)
Accounts payable & accrued expenses (1,055) (24)
Deferred revenue (261) (108)
-------- -------
Net cash provided by operating activities 646 2,755
-------- -------
Cash flows from investing activities:
Proceeds from disposal of fixed assets 237 221
Capital expenditures (2,356) (4,195)
Other assets (8) 89
-------- -------
Net cash used in investing activities (2,127) (3,885)
-------- -------
Cash flows from financing activities:
Borrowings under line of credit 1,800 1,900
Payments on line of credit (500) --
Additions to long-term debt 32 --
Principal payments on long-term debt and
capital lease obligations (63) (122)
Acquisition of treasury stock (46) (6)
Additional costs of public offering of common stock -- (20)
Proceeds from exercise of stock options 106 9
Other liabilities (545) (741)
------- -------
Net cash provided by financing activities 784 1,020
------- -------
Net decrease in cash and cash equivalents (697) (110)
Cash and cash equivalents - beginning of period 2,632 2,465
------- -------
Cash and cash equivalents - end of period $1,935 $ 2,355
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 628 $ 56
Income Taxes $ -- $ 55
Supplemental Schedule of Non-Cash Investing and
Financing Activities:
Like-kind exchange of property -- $ 3,270
Accumulated
Additional Deficit
Common Paid-in Since Treasury
Stock Capital 09/30/85 Stock
------ ------ -------- ------
Balance December 31, 1993 $ 470 $30,981 ($4,493) $215
Issuance of treasury stock -- 36 -- (34)
Acquisition of treasury stock -- -- -- 6
Exercise of stock options 1 8 -- --
Public stock offering additional
costs -- (20) -- --
Net income -- -- 783 --
---- ------- ------- ----
Balance June 30, 1994 $ 471 $31,005 ($3,710) $187
==== ======= ======= ====
Balance December 31, 1994 $471 $31,039 ($2,847) $188
Issuance of treasury stock -- 36 -- (34)
Acquisition of treasury stock -- -- -- 46
Exercise of stock options 4 102 -- --
Net loss -- -- (177) --
---- ------- ------- ----
Balance June 30, 1995 $475 $31,177 ($3,024) $200
==== ======= ======= ====
1. Accounting Policies
Reference is hereby made to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, which includes additional information about
the Company, its operations and its consolidated financial statements, and
contains a summary of major accounting policies followed by the Company in
preparation of its consolidated financial statements. These policies were also
followed in preparing the quarterly financial statements included herein. The
year-end consolidated balance sheet data contained herein was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles.
The management of the Company believes that all adjustments necessary to
make a fair statement of the results in these interim periods have been made.
All adjustments reflected in the financial statements are of a normal recurring
nature except as described in the Notes to Condensed Consolidated Financial
Statements. Net results for the six month period ended June 30, 1995 are not
necessarily indicative of the results to be expected for the full year.
2. Cash and Cash Equivalents
Cash and cash equivalents totalled $1,935,000 at June 30, 1995. Of this
amount, approximately $1,003,000 was available for general corporate purposes
and the balance was held for third parties, including $396,000 in gas and oil
sales proceeds held for eventual distribution to outside working interest and
royalty owners, $321,000 representing the outside interest owners' estimated
share of cash prepaid by CNG Transmission Corporation ("CNG") for future gas
deliveries, and $215,000 withheld from outside working interest owners'
distributions to be utilized for future ad valorem tax payments (Note 3). The
Company's cash balance at June 30, 1995 includes $1,569,000 invested in
commercial paper, U.S. Government and Agency Securities and Bankers' Acceptances
having a current average annualized return of 5.6 percent.
3. Plugging and Ad Valorem Tax Funds
The Company retains a portion of outside investors' monthly gas and oil
production proceeds to be utilized for anticipated future well plugging and
abandonment costs and ad valorem tax payments. The funds, totalling $681,000 at
June 30, 1995, are invested in securities issued or guaranteed by the United
States Treasury at BANK ONE, Texas, N.A. ("BANK ONE") in accounts segregated
from those of the Company, of which $466,000 is included in other assets.
Interest earned on the funds accrues to the benefit of the working interest
owners. Corresponding amounts recorded in assets are included in liabilities.
4. Income Taxes
Income taxes are provided for financial reporting purposes based on
management's best estimate of the effective tax rate expected to be applicable
for the full calendar year.
5. Common Stock Held In Treasury
The Company contributed 10,370 shares of its common stock held in treasury
to the Company's 401(k) Plan on both February 28, 1995 and January 19, 1994.
6. Well Swap
On March 31, 1994, the Company exchanged its interests in 141 gross wells
for outside investors' interests in 237 gross wells. The exchange was effective
March 1, 1994. The exchange has been treated as a like-kind exchange and no
gain or loss has been recognized on this transaction.
7. Section 29 Tax Credits
Effective August 11, 1994, the Company, through a series of transactions,
formed a partnership with a major East Coast financial institution (the
"Institution"). The partnership is structured such that the Institution will be
allocated IRC Section 29 tax credits as a result of production from properties
contributed by the Company to the partnership. The institution initially paid
$1.0 million (reduced by $100,000 for certain expenses incurred by the
Institution), and will pay additional amounts, up to $4.0 million, in
installments prior to December 31, 2002, upon achieving certain production
minimums and satisfying other conditions. The amounts received are being
recognized as other operating income based on production from these properties.
In the first six months of 1995, $322,000 of such income was recognized.
8. Common Stock Designation
On May 12, 1995, the Company's stockholders approved the amendment of the
Company's Certificate of Incorporation to increase the authorized capital of the
Company from 8,500,000 shares to 16,000,000 shares, of which the authorized
Common Stock of the Company was increased from 7,500,000 shares to 15,000,000
shares. The Capital Stock amendment did not change the authorized Preferred
Stock of the Company.
Management's discussion and analysis of changes in the Company's financial
condition, including results of operations and liquidity and capital resources
during the three and six-month periods ended June 30, 1995 and 1994,
respectively, are presented below.
Results of Operations
The Company recorded a net loss of $177,000 for the six months ended
June 30, 1995, compared to net income of $783,000 for the same period of 1994.
A loss from operations for the first six months of 1995 totalled $414,000
compared to income from operations of $1,123,000 for the first six months of
1994.
Total revenues of $6,990,000 in the first six months of 1995 were $412,000
or 6 percent higher than total revenues of $6,578,000 in the first six months of
1994.
Gas and oil sales totalled $6,059,000 in the first six months of 1995 and
represented a $401,000 increase over the same period last year. Higher gas
sales volumes, higher oil sales volumes and higher oil prices contributed
$1,940,000, $224,000 and $104,000, respectively, to the increase and were
substantially offset by lower average gas prices of $1,867,000 as compared
to the first six months of 1994. Gas and oil sales volumes totalled
2,875,445 equivalent thousand cubic feet ("EMCF"), a 38 percent increase
over the 2,075,481 EMCF sold during the six month period ended June 30,
1994. The Company received on average $2.05 per MCF and $16.28 per barrel
("BBL") for the six month period ended June 30, 1995, compared to $2.76 per
MCF and $13.83 per BBL in the same period last year.
Well tending income decreased $288,000 due principally to the reduction in
the number of wells the Company operates for outside investors because of a
well swap effective March 1, 1994 (Note 6).
Other operating revenue increased $299,000 due primarily to the recognition
of income relative to the transaction in which the Company formed a
partnership with an East Coast financial institution with respect to IRC
Section 29 tax credits (Note 7).
Total expenses in the first six months of 1995 were $7,404,000, an increase
of $1,949,000 or 36 percent from expenses in the first six months of 1994 of
$5,455,000.
Operating expenses were higher by $568,000 or 22 percent due primarily to
higher gas and oil lifting expenses of $256,000, higher employee-related
expenses of $169,000 relative to additional employees and higher medical
expenses, and $132,000 in nonrecurring expenses primarily for the Company's
unsuccessful effort to purchase the oil and gas minerals underlying the
Coopers Rock State Forest in Monongalia County, West Virginia.
General and administrative expenses for the first six months of 1995 were
higher by $225,000 or 17 percent as compared to last year due principally
to higher employee-related expenses of $166,000 as a result of higher
medical expenses, an employee settlement, an employee bonus and additional
employees as compared to last year, and higher property taxes of $71,000.
Depreciation, depletion and amortization expense was higher by $544,000 in
the first six months of 1995 due to, among other things, higher depletion
expenses related to the increased drilling activity and acquisitions in
1994.
Interest expense for the first six months of 1995 was $631,000, an increase
of $612,000 over the same period last year due primarily to higher debt
balances.
Non-operating income in the first six months of 1995 totalled $114,000 as
compared to $97,000 in the same period last year.
The Company recorded an income tax benefit of $123,000 for the six month
period ended June 30, 1995, as compared to an income tax provision of $437,000
last year.
The Company reported a net loss of $75,000 for the three months ended June
30, 1995, compared to net income of $321,000 for the three months ended June 30,
1994. Loss from operations totalled $221,000 for the second quarter of 1995,
compared to income from operations of $444,000 for the same period last year.
Second quarter 1995 revenues of $3,530,000 were higher by $322,000 or
10 percent compared to total revenues of $3,208,000 for the same period last
year.
Gas and oil sales increased by $198,000 to $3,048,000 over second quarter
1994 gas and oil sales of $2,850,000 due primarily to higher gas and oil
volumes of $917,000 and $70,000, respectively, and higher oil prices of
$39,000. Lower gas prices adversely affected revenues by $828,000. Gas
and oil sales volumes totalled 1,483,025 EMCF and 1,101,934 EMCF for the
second quarters of 1995 and 1994, respectively. The Company received an
average $1.99 per MCF and $16.50 per BBL for the second quarter of 1995
compared to $2.60 per MCF and $14.68 per BBL last year.
Well tending income of $287,000 for the three months ended June 30, 1995,
was lower by $30,000.
Other revenue increased $154,000 due principally to recognition of income
from IRC Section 29 credits.
Expenses in the three months ended June 30, 1995 totalled $3,751,000 and
were $987,000 or 36 percent higher than the three months ended June 30, 1994,
when expenses totalled $2,764,000.
Operating expenses of $1,609,000 for the quarter were $300,000 higher than
the second quarter last year due principally to higher employee-related
expenses, including medical expenses, gas and oil operating expenses and
abandonment expenses associated with the above mentioned Coopers Rock
transaction.
General and administrative expenses were $98,000 higher than the same
period last year due to, among other things, higher employee-related
expenses including higher medical expenses.
Depreciation, depletion and amortization expense was higher by $258,000 for
the same reason stated in the six-months results. Interest expense was
higher by $331,000 due to higher debt balances and the absence of the
capitalization of interest expense related to drilling projects.
Non-operating income in the second quarter of 1995 totalled $50,000 or a
decrease of $13,000 from the second quarter of 1994 due to, among other things,
lower gains on asset sales.
The Company recorded an income tax benefit of $96,000 in the second quarter
of 1995 as compared to an income tax provision of $186,000 for the second
quarter of 1994.
Liquidity and Capital Resources
Working Capital. At June 30, 1995, the Company had working capital of
$1,320,000, as compared to $835,000 at December 31, 1994. The $485,000 increase
in working capital is due to predominately a reduction in accounts payable due
to lower drilling levels. Because the Bank One credit facility agreement, as
amended, calls for the payment of interest only until July 1, 1998, current
liabilities on the Company's June 30, 1995, balance sheet do not include any
principal payments relative to the Bank One credit facility.
Cash and cash equivalents totalled $1,935,000 at June 30, 1995. Of this
amount, approximately $1,003,000 was available for general corporate purposes
and the balance was held for third parties. Operating activities provided a net
$646,000 while investing activities used a net $2,127,000 including $2,356,000
in capital expenditures. Financing activities provided a net $784,000.
Revolving Credit Facility. The Company has in place a $25.0 million
revolving credit facility with Bank One. Currently $10.9 million is available
for borrowing by the Company. Interest accrues and is paid monthly at a rate of
Bank One's prime rate plus three-quarters of one percent.
The Company is currently negotiating an Amended and Restated Credit
Agreement with Bank One which will provide, among other things, for an increased
facility amount and a reduction in the interest rate.
Capital Expenditures and Commitments. In the first six months of 1995, the
Company's capital expenditures totalled $2,356,000 including approximately
$1,990,000 spent on gas and oil investment activities.
Most of the Company's capital spending is discretionary and the ultimate
level of spending will be dependent, among other things, on the Company's
assessment of the gas and oil business environment, the number of gas and oil
prospects available to the Company, and gas and oil business opportunities in
general. The level of the Company's 1995 capital expenditures will to a great
extent depend upon the gas prices received by the Company. Based on current gas
futures prices, which indicate the Company will receive lower gas prices, as
compared to the average prices received in the past 15 years, the Company's
current capital budget limits annual drilling activities to an estimated five to
ten wells in order to maintain leasehold positions, fulfill contractual
commitments, defend competitive drainage positions and explore oil prospects.
Over the past five years, the Company has averaged drilling 17 wells per year.
The Company will continue with its enhancement program on existing wells,
particularly the wells acquired in 1994 in Kentucky and where the Company has
established a significant acreage position. The Company's objective will be to
maintain current production and gas and oil reserve levels through well
enhancements and limited drilling activity. The Company plans to continue with
its aggressive acreage acquisition strategy and will position itself to increase
both exploratory and development drilling when gas prices recover. The Company
remains committed to the acquisition of producing properties at favorable
prices.
Settlement of Columbia Litigation Claims. On June 8, 1992, the Company
settled its outstanding gas purchase contract claims against Columbia. Pursuant
to the settlement agreement, the Company, on behalf of itself and other interest
owners in the wells covered by the settlement, has an allowed claim in the
amount of $11,000,000 against Columbia, without security or priority, in
Columbia's bankruptcy reorganization proceedings. The Company's share of the
allowed claim is estimated to be approximately 55 percent, with the balance
going to the other interest owners in the wells covered by the settlement. The
Company's current financial statements do not include any benefits of the
settlement. The timing and actual amount to be received by the Company and
other interest owners will be affected by the terms of Columbia's reorganization
plan and the amount of assets available to satisfy Columbia's unsecured
creditors. Columbia is seeking bankruptcy court approval of its second Amended
Plan of Reorganization, as further amended dated July 17, 1995 (the "Plan").
The Plan provides for an initial distribution to the Company of 68.875 percent
of the allowed claim upon confirmation of the Plan, and a potential additional
distribution of up to 3.625 percent of the allowed claim in the future depending
upon various contingencies. The Plan remains subject to bankruptcy court
approval in accordance with the requirements for confirmation of a bankruptcy
plan of reorganization set forth in Chapter 11 of the United States Bankruptcy
Code.
Shut-ins. During mid-July 1995, CNG informed the Company and other local
suppliers that CNG system production would be shut-in for a period of up to two
weeks for system maintenance. Also during this time, Hope Gas, Inc. ("Hope")
notified the Company that all Hope system production would have to be shut-in
for a two-week period in August for system maintenance. Additionally, the Wiser
Oil Company notified the Company of a two-week system maintenance shut-in
affecting the Company's Kentucky production. These shut-ins will adversely,
though not materially, affect third quarter 1995 sales volumes, revenues and
cash flow.
Item 4. Submission of Matters to a Vote of Security Holders
The 1995 Annual Meeting of Stockholders of the Company was held on May 12,
1995, for the purpose of electing two directors each to serve a three year term
expiring at the 1998 Annual Meeting of Stockholders and one director to serve a
one year term expiring at the 1996 Annual Meeting. Robert S. Maust and Thomas
M. Levine were each reelected to three year terms and James B. Gehr was
reelected to a one year term. The term of office as director for each of
Stephen L. Barr, Richard R. Hoffman, John L. Schwager and James H. Weber
continued after the meeting.
Messrs. Maust, Levine and Gehr received the following votes:
Votes
Against/
Votes For Withheld Abstentions
--------- -------- -----------
Robert S. Maust 3,832,270 489,624 0
Thomas M. Levine 3,827,560 494,334 0
James B. Gehr 3,830,766 491,128 0
The stockholders also approved a proposal to increase the authorized
capital of the Company from 8,500,000 to 16,000,000 shares, of which authorized
Common Stock was increased from 7,500,000 to 15,000,000 shares, par value $.10
per share. There were 3,845,270 shares voted in favor of the Proposal, 438,715
against and 37,909 abstaining.
Additionally, there were 4,001,666 shares voted in favor of the proposal to
increase the number of shares available for issuance under the Alamco, Inc. 1992
Employees Stock Option Plan from 100,000 to 250,000, with 285,670 shares voting
against and 34,558 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description Filing
---------- ----------- ------
3.1 Articles of Incorporation of Alamco, Inc., Filed herewith
as amended.
4.1 Certificate of Amendment of Certificate of Filed herewith
Incorporation of Alamco, Inc., as filed
with the Delaware Secretary of State on
May 12, 1995.
4.2 Certificate of Designation of Common Stock Filed herewith
of Alamco, Inc., as filed with the Delaware
Secretary of State on May 12, 1995.
10.1 Alamco, Inc. Directors' Deferred Income Filed herewith
Plan.
10.2 Form of Deferral Agreement between Filed herewith
Alamco, Inc. and its Directors.
27 Financial Data Schedule. Filed herewith
(b) No current reports on Form 8-K were filed during the quarter ended June 30,
1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the under-
signed thereunto duly authorized.
August 11, 1995 /s/ John L. Schwager
-------------------------------
John L. Schwager, President,
Chief Executive Officer, and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
statement of income and balance sheet and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,935
<SECURITIES> 0
<RECEIVABLES> 2,636
<ALLOWANCES> 9
<INVENTORY> 154
<CURRENT-ASSETS> 5,162
<PP&E> 78,875
<DEPRECIATION> 30,136
<TOTAL-ASSETS> 55,431
<CURRENT-LIABILITIES> 3,842
<BONDS> 14,266
<COMMON> 475
0
0
<OTHER-SE> 27,953
<TOTAL-LIABILITY-AND-EQUITY> 55,431
<SALES> 6,059
<TOTAL-REVENUES> 6,990
<CGS> 3,170
<TOTAL-COSTS> 5,215
<OTHER-EXPENSES> 1,558
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 631
<INCOME-PRETAX> (300)
<INCOME-TAX> (123)
<INCOME-CONTINUING> (177)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (177)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
Exhibit 3.1
ARTICLES OF INCORPORATION
OF ALAMCO, INC.
including all amendments as of
May 12, 1995
------------------------------
ARTICLE I.
(As amended June 1, 1983)
Name
"The name of the corporation (hereinafter referred to as the "Company")
is:
"Alamco, Inc."
ARTICLE II.
(As revised July 24, 1984 and
effective July 30, 1984)
Registered Office
The address of its registered office in the State of Delaware is Corpora-
tion Trust Center, 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
ARTICLE III.
Purposes
The nature of the business and the object and purposes of the Company are:
A. To conduct the business of mining, preparing for market, and
otherwise producing and dealing in coal, oil, gas, clay, and all other minerals
and the products and by-products thereof of every kind and description and by
whatsoever process the same can be or may hereafter be produced, and generally
to buy, sell, exchange, lease, hold, acquire, and deal in lands, timber, mines,
mineral rights and claims, and to conduct all business relating thereto,
including the processing, handling, storage, distribution and transportation of
timber, minerals, and all products and by-products of the earth; and
B. To engage in any other lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware.
ARTICLE IV.
(As amended May 12, 1995)
Capital Stock
The total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue is sixteen million
(16,000,000) shares, of which fifteen million (15,000,000) shares shall
be Common Stock with a par value of ten cents ($0.10) per share, and of
which one million (1,000,000) shares shall be Preferred Stock with a par
value of One Dollar ($1.00) per share, and the shares of Common Stock and
Preferred Stock are expressly authorized to be issued by the Board of
Directors from time to time in one or more classes of stock, voting or
non-voting, or in one or more series of stock within any class thereof,
and the Board of Directors is expressly authorized to determine, in a
resolution providing for the issuance of any class or series of Common
Stock or Preferred Stock, the designations, preferences, dividend rate,
redemption provisions, sinking fund provisions, rights on liquidation or
dissolution, voting power, conversion rights, and other preferences and
relative, participating, option or other special rights and qualifications
or restrictions, of shares of such class or series not fixed and deter-
mined by the Certificate of Incorporation."
ARTICLE V.
Board of Directors
A. Powers of the Board
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized:
(1) To make, alter or repeal the By-laws of the Company;
(2) To borrow money for any of the objects or purposes of the Company
and issue notes, bonds or other evidence of indebtedness therefor and secure
payment thereof by deed of trust, mortgage, pledge or other encumbrance on any
or all property of the Company;
(3) To sell, assign, lease, exchange, or dispose of, in any manner, all
or any part of the property and business of the Company at any time, including
goodwill, assets, privileges and rights of any kind, for cash, or upon credit,
or in consideration of stocks, bonds or other obligations of any person or
corporation;
(4) To buy, acquire, own, sell, transfer, lease, exchange, mortgage,
pledge, encumber, or otherwise dispose of the goodwill, rights, property and
assets of all kinds of any person, firm or corporation, domestic or foreign, and
pay for the same in cash or upon credit, or in stocks, bonds, debentures, notes
or other securities of the Company, or otherwise in any manner permitted by law;
and
(5) By a majority of the whole board, to designate one or more commit-
tees, each committee to consist of one or more of the directors of the Company.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee.
B. Term and Number of Board Members. (As amended June 1, 1983).
The number of members of the Board of Directors will be fixed from time to
time by the Board of Directors but (subject to vacancies) in no event may there
be less than three directors.
The Directors shall be divided into three classes, each consisting of one-
third of such directors, as nearly as may be. At the annual stockholders'
meeting in 1983, one class of such directors shall be elected for a one-year
term, one class for a two-year term and one class for a three-year term.
Commencing with the stockholders' meeting in 1984, and at each succeeding annual
stockholders' meeting, successors to the class of directors whose term expires
at such annual stockholders' meeting shall be elected for a three-year term. If
the number of such directors is changed, an increase or decrease in such
directors shall be apportioned among the classes so as to maintain the number of
directors comprising each class as nearly equal as possible, and any additional
directors of any class shall hold office for a term which shall coincide with
the remaining term of such class. A director shall hold office until the annual
stockholders' meeting for the year in which his term expires and until his
successor shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification, or removal from office.
(The following paragraph was amended effective May 11, 1990).
Any vacancy in the Board of Directors resulting from death, resignation,
removal, increase in number of directors, or other cause may be filled only by a
vote of two-thirds of the whole Board of Directors at any regular or special
meeting of the Board of Directors called for that purpose. Any director so
elected shall serve until the next election of the class for which such director
shall have been chosen and until his successor shall be elected and qualified.
Any director shall be subject to removal in the manner now or hereafter pre-
scribed by the laws of the State of Delaware for a corporation whose board is
classified.
C. Limitation of Liability of Board Members. (Added by Amendment
effective May 27, 1987).
A director shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided; however, that a director shall be liable to the corporation or its
stockholders (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase or redemption which is
unlawful under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.
ARTICLE VI.
Records
The books of the Company may be kept (subject to any requirement of law)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the By-laws of the Company.
Elections of Directors need not be by written ballot unless the By-laws of the
Company shall so provide.
ARTICLE VII.
Stockholder Action
Any action upon which a vote of stockholders of the Company is required or
permitted may be taken only at a meeting of stockholders, unless provided
otherwise in the By-laws of the Company.
ARTICLE VIII.
(As amended May 11, 1990)
Amendments
A. General. The Company reserves the right to amend, alter, change
or repeal any provisions contained in this Certificate of Incorporation, as
amended, in the manner now or hereafter prescribed by the laws of the State of
Delaware and all rights herein conferred are granted subject to this reserva-
tion, except as otherwise provided in this Article.
B. Specific Amendments. The affirmative vote of the holders of at
least two-thirds of the outstanding shares of Common Stock and two-thirds of the
outstanding shares of each series of Preferred Stock, given in person or by
proxy, at a meeting called for the purpose of voting thereon shall be required
to amend or repeal Article VII; to amend or repeal Section B of Article V; and
to amend or repeal this Section B of Article VIII.
ARTICLE IX.
Incorporation
The incorporator is K. Dale Wissman, whose mailing address is 200 West
Main Street, P. O. Box 1740, Clarksburg, West Virginia 26302-1740.
Dated: May 12, 1995
Exhibit 4.1
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF ALAMCO, INC.
Alamco, Inc., a corporation organized and existing under the laws of the State
of Delaware (the "Corporation"), does hereby certify:
FIRST: That the amendment to the Corporation's Certificate of Incorporation set
forth in the following resolution was unanimously approved by the Corporation's
Board of Directors at a meeting held on March 24, 1995 and was duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware:
NOW, THEREFORE, BE IT RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by deleting in its entirety the first paragraph of
Article IV thereof and substituting therefor the following provision so that, as
amended, the first paragraph of Article IV shall be amended and restated to read
in its entirety as follows:
ARTICLE IV
Capital Stock
The total number of shares of all classes of capital stock which the Corporation
shall have the authority to issue is sixteen million (16,000,000) shares, of
which fifteen million (15,000,000) shares shall be Common Stock with a par value
of ten cents ($0.10) per share, and of which one million (1,000,000) shares
shall be Preferred Stock with a par value of One Dollar ($1.00) per share, and
the shares of Common Stock and Preferred Stock are expressly authorized to be
issued by the Board of Directors from time to time in one or more classes of
stock, voting or non-voting, or in one or more series of stock within any class
thereof, and the Board of Directors is expressly authorized to determine, in a
resolution providing for the issuance of any class or series of Common Stock or
Preferred Stock, the designations, preferences, dividend rate, redemption
provisions, sinking fund provisions, rights on liquidation or dissolution,
voting power, conversion rights, and other preferences and relative,
participating, option or other special rights and qualifications or restric-
tions, of shares of such class or series not fixed and determined by the
Certificate of Incorporation.
SECOND: That said amendment has been consented to and authorized by the
stockholders of the Corporation at an annual meeting held on May 12, 1995, and
was duly adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Alamco, Inc. has caused this Certificate to be signed and
attested by its duly authorized officers this 12th day of May 1995.
ALAMCO, INC.
By: /s/ John L. Schwager, President
------------------------------------
John L. Schwager, President
ATTEST:
By: /s/ Jane Merandi, Secretary
------------------------------------
Jane Merandi, Secretary
Exhibit 4.2
CERTIFICATE OF DESIGNATION
OF COMMON STOCK
OF ALAMCO, INC.
Alamco, Inc., a corporation organized and existing under the General Corporation
Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by Article IV
of the Certificate of Incorporation, as amended, of the Company, authorizing the
issuance of up to 15,000,000 shares of common stock of the Company, and pursuant
to the provisions of Section 151 of the Delaware General Corporation Law, as
amended, the Board of Directors of the Company, at a meeting duly called and
held on May 12, 1995, duly adopted the following resolution, providing for the
issuance of a class of 15,000,000 shares of common stock, which resolution is as
follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors of
this Company in accordance with the provisions of its Certificate of Incorpora-
tion, as amended, there be, and hereby is, created, out of the 15,000,000 shares
of common stock of the Company authorized in Article IV of its Certificate of
Incorporation, as amended, a class of common stock of the Company with the
following voting powers, designations, preferences and relative, participating,
optional and other special rights and qualifications, limitations and restric-
tions thereof:
1. Designation and Number of Shares of Common Stock. Shares of this class of
common stock of the Company shall be designated and known as the Common Stock,
of the par value of ten cents ($.10) per share (the "Common Stock"). The number
of shares of the Common Stock shall be fifteen million (15,000,000). All shares
of common stock of the Company currently issued and outstanding, without further
action by the stockholders of such shares, shall hereby be designated and known
as shares of the Common Stock with all of the designations, rights, provisions
and restrictions set forth in this Resolution.
2. General. (a) Subject to the terms of Sections 3 and 4 of this Resolu-
tion, each share of Common Stock issued and outstanding shall be identical in
all respects with all other shares of Common Stock, and no dividends shall be
paid on any shares of Common Stock unless the same dividend is paid on all
shares of Common Stock outstanding at the time of such payment.
(b) Except for and subject to those rights expressly granted
to the holders of Preferred Stock (as such term is defined in Section 4) and
except as may be provided by the Delaware General Corporation Law and as
otherwise set forth in this resolution, the holders of Common Stock shall have
all other rights of stockholders including, but not by way of limitation,
(i) the right to receive dividends, when, as and if declared by the Board of
Directors out of assets lawfully available therefor, and (ii) in the event of
any distribution of assets upon liquidation, dissolution or winding up of the
Company or otherwise, the right to receive ratably and equally all the assets
and funds of the Company remaining after the payment to the holders of Preferred
Stock and of the specific amounts which they are entitled to receive upon such
liquidation, dissolution or winding up of the Company as herein provided. All
payments made upon Common Stock shall be made pro rata per share.
(c) In the event that the holder of any shares of Common Stock
shall receive any payment of any dividend on, liquidation of, or other amounts
payable with respect to, any shares of Common Stock which, in accordance with
the terms of the Company's Certificate of Incorporation, as amended, he is not
then entitled to receive, he will forthwith deliver the same to the holders of
shares of Preferred Stock, as the case may be, in the form received, and until
it is so delivered will hold the same in trust for such holders.
3. Voting. Except as otherwise provide in the Delaware General Corporation
Law and Company's Certificate of Incorporation, as amended, each holder of
Common Stock shall be entitled to one vote for each share of Common Stock
standing in his name on the books of the Company on all matters submitted to a
vote of stockholders of the Company.
4. Definitions. "Preferred Stock" shall have the meaning given such term in
Article IV of the Company's Certificate of Incorporation, as amended.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by its
President and attested by its Secretary this 12th day of May 1995.
ALAMCO, INC.
By: /s/ John L. Schwager, President
------------------------------------
John L. Schwager, President
ATTEST:
By: /s/ Jane Merandi, Secretary
------------------------------------
Jane Merandi, Secretary
Exhibit 10.1
ALAMCO, INC.
DIRECTORS' DEFERRED INCOME PLAN
EFFECTIVE JUNE 15, 1995
TABLE OF CONTENTS
Page
PURPOSE OF PLAN 1
ARTICLE I DEFINITIONS 2
Section 1.01 Annual Retainer 2
Section 1.02 Beneficiary 2
Section 1.03 Board of Directors 2
Section 1.04 Borrowing Rate 2
Section 1.05 Change in Control 2
Section 1.06 Code 3
Section 1.07 Committee 3
Section 1.08 Company 3
Section 1.09 Company Voting Securities 3
Section 1.10 Compensation 3
Section 1.11 Deferred Compensation Account 3
Section 1.12 Director 3
Section 1.13 Effective Date 3
Section 1.14 Elective Contributions 3
Section 1.15 Eligible Director 3
Section 1.16 Outstanding Shares 3
Section 1.17 Participant 4
Section 1.18 Plan 4
Section 1.19 Plan Year 4
ARTICLE II ADMINISTRATION 4
ARTICLE III ELIGIBILITY TO PARTICIPATE IN PLAN 4
ARTICLE IV ELECTIVE CONTRIBUTIONS 4
Section 4.01 Elective Contributions 4
Section 4.02 Timing of Deferral Elections 5
ARTICLE V DETERMINATION OF INVESTMENT INCOME
ON DEFERRED COMPENSATION ACCOUNTS 5
ARTICLE VI PAYMENT OF BENEFITS 5
Section 6.01 Timing of Distribution 5
Section 6.02 Distribution Other Than by Reason of Death 5
Section 6.03 Death Benefits 6
ARTICLE VII MAINTENANCE AND INVESTMENT OF DEFERRED
COMPENSATION ACCOUNTS 6
Section 7.01 Maintenance by Company of Deferred
Compensation Accounts 6
Section 7.02 Investment of Deferred Compensation Accounts 6
Section 7.03 Rights of Participants Solely to Plan Benefits
and Not to any Plan Investments 6
ARTICLE VIII AMENDMENT OR TERMINATION OF THE PLAN 7
ARTICLE IX GOVERNING LAW 7
ARTICLE X MISCELLANEOUS PROVISIONS 7
Section 10.01 Non-Assignability of Benefits 7
Section 10.02 Rules of Construction 7
ARTICLE XI EXECUTION 7
PURPOSE OF PLAN
This Plan, known as the Alamco, Inc. Directors' Deferred Income Plan
(the "Plan"), is adopted by Alamco, Inc. (the "Company") effective June 15,
1995. The Plan is intended to permit eligible directors of the Company to elect
to defer receipt of future compensation that would otherwise be payable in cash
currently by the Company and have such deferred amounts credited to individual
bookkeeping accounts maintained by the Company in the names of such
Participants. The Plan is also designed to permit the Company to credit
Participants with deemed investment income upon all such elective
contributions.
The Plan shall be administered in accordance with the rules of the
Internal Revenue Code of 1986, as amended ("Code"), applicable to non-qualified
deferred compensation plans. It is intended that all contributions and deemed
investment income credited to Participants under the Plan will not be taxable to
such Participants for Federal income tax purposes until the distribution of such
amounts to Participants in accordance with this Plan.
ARTICLE I
DEFINITIONS
1.01 "Annual Retainer" shall mean the annual rate of payment of the
retainer fee payable by the Company to Eligible Directors.
1.02 "Beneficiary" shall mean the person, persons, entity or
entities designated by a Participant to receive the death benefits payable
hereunder in the event of the Participant's death.
1.03 "Board of Directors" shall mean the Board of Directors of the
Company.
1.04 "Borrowing Rate" shall mean the interest rate, as determined
by the person serving or acting as the chief financial officer of the Company,
equal to (i) the current rate payable by the Company with respect to its
unsecured bank debt, if any, or (ii) if the Company currently has no unsecured
bank debt, then the current rate payable by the Company with respect to its
secured bank debt, if any, or (iii) if the Company currently has no bank debt,
then the current prime rate of the Company's primary lender plus three-fourths
of one percent (0.75%).
1.05 "Change in Control" shall mean:
(a) The acquisition in one or more transactions, other than from
the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended ("Exchange Act")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of a number of Company
Voting Securities in excess of 15% of the Company Voting Securities unless
such acquisition has been approved by the Board of Directors;
(b) Any election has occurred of persons to the Board of Directors
of the Company that causes two-thirds of the Board of Directors to consist
of persons other than (i) persons who were members of the Board of
Directors on the Effective Date and (ii) persons who were nominated for
elections as members of the Board of Directors at a time when two-thirds
of the Board of Directors consisted of persons who were members of the
Board of Directors on the Effective Date; provided, however, that any
person nominated for election by a Board of Directors at least two-thirds
of whom constituted persons described in clauses (i) and/or (ii) or by
persons who were themselves nominated by such Board of Directors shall,
for this purpose, be deemed to have been nominated by a Board of Directors
composed of persons described in clause (i);
(c) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, unless, following such
reorganization, merger or consolidation, all or substantially all of the
individuals and entities who were the respective beneficial owners of the
Outstanding Shares and Company Voting Securities immediately prior to such
reorganization, merger or consolidation, following such reorganization,
merger or consolidation beneficially own, directly or indirectly, more
than eighty (80%) of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such
reorganization, merger or consolidation in substantially the same
proportion as their ownership of the Outstanding Shares and Company Voting
Securities immediately prior to such reorganization, merger or
consolidation, as the case may be; or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a sale or other
disposition of all or substantially all the assets of the Company.
1.06 "Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
1.07 "Committee" shall mean the Compensation Committee of the Board
of Directors.
1.08 "Company" shall mean Alamco, Inc., a Delaware corporation, and
any successor-in-interest thereto.
1.09 "Company Voting Securities" shall mean the combined voting
power of all outstanding voting securities of the Company entitled to vote
generally in the election of the Board of Directors.
1.10 "Compensation" shall mean all cash remuneration that an
Eligible Director is entitled to receive from the Company for services as a
director. Non-cash remuneration shall not be subject to deferral under this
Plan.
1.11 "Deferred Compensation Account" shall mean each of the
bookkeeping accounts established and maintained by the Company for Participants
under the Plan for purposes of reflecting the Participant's Elective
Contributions and the deemed investment income with respect to deferred amounts,
net of any and all distributions of any of such amounts.
1.12 "Director" shall mean a member of the Board of Directors.
1.13 "Effective Date" shall mean June 15, 1995.
1.14 "Elective Contributions" shall mean the amount of Compensation
not yet earned by a Participant which the Participant elects to defer under the
Plan pursuant to Article IV.
1.15 "Eligible Director" shall mean each Director who receives an
Annual Retainer from the Company.
1.16 "Outstanding Shares" shall mean, at any time, the issued and
outstanding Shares of Common Stock of the Company.
1.17 "Participant" shall mean an Eligible Director who has elected
to participate in the Plan and who has a Deferred Compensation Account under the
Plan.
1.18 "Plan" shall mean the Alamco, Inc. Directors' Deferred Income
Plan, effective June 15, 1995, as set forth herein and as the same may be
amended from time to time.
1.19 "Plan Year" shall mean each period from the date of the Annual
Meeting of the Company's Stockholders in one year to the day before the date of
the Annual Meeting of the Stockholders in the following year; provided, however,
that the first Plan Year shall begin on the Effective Date and end on the day
before the date of the 1996 Annual Meeting of Stockholders.
ARTICLE II
ADMINISTRATION
The Committee shall implement and administer the Plan. The
Committee shall have the full power, authority and discretion to interpret and
administer the Plan provisions. In implementation of this responsibility, the
Committee may adopt rules, procedures or regulations relative to the
administration of the Plan. Members of the Committee shall not be liable for
any action taken or decision made in good faith relating to the Plan. The
determination by the Committee as to any issue arising under the Plan, including
questions of construction and interpretation of the Plan, shall be final,
binding and conclusive upon the Participant, his Beneficiary and all other
persons.
ARTICLE III
ELIGIBILITY TO PARTICIPATE IN PLAN
Any Eligible Director shall be eligible to participate in the Plan
upon the later of (i) the date on which he becomes an Eligible Director or (ii)
the Effective Date. An Eligible Director who becomes a Participant shall
continue to be a Participant until such time as his Deferred Compensation
Account has been completely distributed to him or his Beneficiary.
ARTICLE IV
ELECTIVE CONTRIBUTIONS
4.01 Elective Contributions. An Eligible Director may elect to
participate in the Plan by executing an irrevocable written agreement
authorizing the Company to withhold all or a portion of his Compensation for a
Plan Year. Elective Contributions shall be either in increments of one percent
(1%) of the Participant's Compensation or in multiples of one thousand dollars
($1,000). Such written agreement shall also set forth (i) the Eligible
Director's election of a distribution method as described in Section 6.02 and
(ii) if different from the date specified in Section 6.01, the date as of which
the Eligible Director elects to have his/her distribution made or commenced,
provided that any such date elected by the Eligible Director shall be not less
than one (1) year from date of such written deferral agreement.
4.02 Timing of Deferral Elections. Deferral elections with
respect to Compensation for a Plan Year shall be made prior to the first day of
such Plan Year; provided, however, that the Committee may issue uniform
procedures allowing new Eligible Directors to make initial deferral elections
within a short time after the date they first become Eligible Directors if the
Committee, in its sole discretion, is satisfied that such deferral elections are
consistent with the rules governing the deferral of taxation of amounts so
deferred.
ARTICLE V
DETERMINATION OF INVESTMENT INCOME
ON DEFERRED COMPENSATION ACCOUNTS
Until a Participant's Deferred Compensation Account is fully
distributed, deemed investment income shall be allocable to such Deferred
Compensation Accounts at a rate of interest equal to the Borrowing Rate as of
the date such deemed investment income is to be calculated. Deemed investment
income shall be allocated to Participants' Accounts as of the last day of each
calendar month and as of such other dates as the Committee shall determine.
ARTICLE VI
PAYMENT OF BENEFITS
6.01 Timing of Distribution. Each Participant's Deferred
Compensation Account shall be distributed, or commence to be distributed, to the
Participant within sixty (60) days after the occurrence of the earlier of (i)
the date of termination of the Participant's service as a Director on account of
resignation, retirement, disability, death or any other reason and (ii) the date
on which a Change in Control occurs. The Participant may, prior to his or her
commencement of participation hereunder (or at such other time as the Committee
may permit after consulting with counsel with respect to the tax consequences
thereof), designate a date as of which distributions shall be made or commence,
if earlier than the dates specified in clauses (i) or (ii) above.
6.02 Distribution Other Than by Reason of Death. If and when a
Participant becomes entitled to a distribution in accordance with Section 6.01,
other than by reason of the death of the Participant, at the sole election of
the Participant, the Participant's Deferred Compensation Account shall be made
to him in one of the following forms:
(a) Lump sum payment in cash of the value of the Participant's
Deferred Compensation Account as of the last day of the month immediately
preceding the month in which such payment is made; or
(b) Substantially equal quarterly or annual payments in cash over
a period of five (5), ten (10) or fifteen (15) years, with each such
installment being equal to the balance credited to the Participant's
Deferred Corporation Account as of the last day of the month immediately
preceding the month in which such installment is paid divided by the
number of installments which remain to be paid (including the current
installment being computed). If a Participant who elects installment
payments dies before all such payments have been completed, the remaining
benefits shall be paid to the Participant's Beneficiary either in a lump
sum or in accordance with the original installment payment schedule, as
elected by the Participant as part of his or her original distribution
election.
A Participant's election of a method of distribution shall be made prior to the
commencement of his or her participation under this Plan and shall be
irrevocable and never subject to change except prospectively, unless otherwise
determined by the Committee after consulting with counsel with respect to the
tax consequences of such a change.
6.03 Death Benefits. In the event that the Participant dies prior
to the date his distribution is made or commenced pursuant to Section 6.02, the
Participant's Beneficiary shall receive a lump sum death benefit in cash equal
to the value of the Participant's Deferred Compensation Account as of the last
day of the month immediately preceding the month in which such death benefit is
paid.
ARTICLE VII
MAINTENANCE AND INVESTMENT
OF DEFERRED COMPENSATION ACCOUNTS
7.01 Maintenance by Company of Deferred Compensation Accounts. The
Company shall establish and maintain on its books a Deferred Compensation
Account for each Participant. Each Participant's Deferred Compensation Account
shall be credited with the amount of the Participant's Elective Contributions
for such Plan Year at the time or times during such Plan Year that the
Participant's Compensation become subject to his deferral election and shall be
adjusted to reflect deemed investment income as provided in Article V and with
any distributions during the Plan Year pursuant to Article VI.
7.02 Investment of Deferred Compensation Accounts. It is the
intention of the Company that the Plan be an unfunded plan for purposes of the
Code and the Employee Retirement Income Security Act of 1974, as amended. The
Company shall be free to invest or not invest Deferred Compensation Accounts as
the Company in its sole discretion shall determine. Any investments which the
Company determines to make with respect to the assets allocated to the Deferred
Compensation Accounts shall remain, until distributed to Participants and their
Beneficiaries in accordance with the terms of the Plan, assets of the Company
and subject to the general creditors of the Company. The Company may in its
discretion establish a grantor trust for use in funding the benefits under the
Plan with a Trustee to be selected by the Company or establish such other
investment vehicle as the Board of Directors may determine.
7.03 Rights of Participants Solely to Plan Benefits and Not to any
Plan Investments. In the event that the Company determines to invest Deferred
Compensation Accounts in a grantor trust, insurance contract or other investment
vehicle, no Participant, Beneficiary or any other person shall at any time have
any right to all or any portion of any of such invested assets. The sole claim
of any Participant or Beneficiary hereunder shall be to any benefit provided
hereunder. Any grantor trust, insurance contract or other investment of
Deferred Compensation Accounts established in the sole discretion of the Company
shall be subject at all times to the claims of the Company's general creditors.
Participants shall have the status of general unsecured creditors of the Company
and the Plan shall constitute a mere promise by the Company to make benefit
payments in the future.
ARTICLE VIII
AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors shall have the right to amend or terminate
the Plan at any time; provided, however, that no such amendment or termination
of the Plan will adversely affect any benefit theretofore accrued by any
Participant under the Plan. In the event of termination of the Plan, each
Participant's Deferred Compensation Account shall continue to accrue investment
income until the occurrence of an event giving rise to distribution of any
Deferred Compensation Account as provided in the Plan.
ARTICLE IX
GOVERNING LAW
The Plan shall be governed by the laws of the State of Delaware
other than the conflict of law provisions of such laws.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Non-Assignability of Benefits. A Participant's rights to
benefit payments under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or the Participant's Beneficiary.
10.02 Rules of Construction. Masculine terms contained in the Plan
shall be construed to contain the feminine, and singular terms shall be
construed to include the plural, wherever necessary for a reasonable
interpretation of the Plan.
ARTICLE XI
EXECUTION
To record the adoption of this Plan, the Company has caused its
appropriate officer to affix his name hereto as of the 15th day of June, 1995.
ATTEST: ALAMCO, INC
ALAMCO, INC.
/s/ Jane Merandi /s/ John L. Schwager
By: -------------------------- By: ---------------------
Exhibit 10.2
FORM OF DEFERRAL AGREEMENT BETWEEN
ALAMCO, INC. AND ITS DIRECTORS
This is a Deferral Agreement between the undersigned and Alamco, Inc. (the
"Company") pursuant to the terms of the Alamco, Inc. Directors' Deferred Income
Plan (the "Plan"). The terms of the Plan are incorporated by reference as if
set forth in full herein. Capitalized terms used in this Deferral Agreement,
unless specifically defined herein, shall have the respective meanings given to
such terms in the Plan.
The undersigned elects to become a Participant under the Plan,
effective as of the date hereof, and further elects to defer, pursuant to the
terms of the Plan, ------- percent/$--------- (complete either the percentage or
the dollar amount, not both) of all Compensation earned in connection with
performance of services as a director of the Company beginning -----------------
--, 19-----.
This election shall be effective for Plan Years beginning after the
date hereof until the Plan Year next beginning after the date on which the
undersigned notifies the Company to change or suspend future deferrals pursuant
to the terms of the Plan on a form provided by the Company. The undersigned
hereby revokes any prior deferral elections made under the Plan. The
undersigned acknowledges that this deferral election is subject to all of the
applicable terms and conditions of the Plan.
The undersigned agrees that this election to defer shall be
continued in force and effect as to Compensation which is earned for each Plan
Year for which this election to defer is effective until distribution of such
deferred compensation to the undersigned, or to the undersigned's beneficiary in
the event of the undersigned's death, as provided in the Plan. The undersigned
also understands that he/she may change the amount deferred or suspend deferrals
with respect to Compensation earned for Plan Years commencing after the
undersigned's delivery to the Company of a written notice of change or
suspension. Further, the undersigned agrees that, if he/she suspends deferrals,
he/she may make a new election to again become a Participant in the Plan and
that any new election to defer payment of Compensation must be made before the
beginning of the period of service for which the Compensation is payable, which
period is the Plan Year.
The undersigned also understands that all amounts deferred under the
Plan, together with any interest credited to those amounts, shall be distributed
in accordance with the terms of the Plan. Section 6.01 governs the timing of
distributions under the Plan. The undersigned may (but need not) elect a
different distribution date. The undersigned hereby irrevocably elects the
following distribution date or event -------------- (insert a date or a
birthday). The undersigned irrevocably elects the following distribution method
(check one):
( ) lump sum
( ) installment payments over ------- (5, 10 or 15) years
payable ------------- (quarterly or annually)
If the undersigned should die prior to receipt of the entire
distribution to which he/she is entitled, then all of the distribution to which
the undersigned is entitled under the Plan and which has not been distributed at
the date of death shall be distributed to -------------
----------------- (insert name of beneficiary) in the manner and at the time
specified in the Plan.
------------------------------ ---------------------------
Date Signature
---------------------------
----------------------------- Print Name
Social Security Number
Address:
---------------------------
---------------------------
---------------------------
---------------------------
Phone Number
