<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
..............................................................................
(Name of Registrant as Specified in Its Charter)
..............................................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
...............................................................................
2) Aggregate number of securities to which transaction applies:
...............................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
...............................................................................
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
...............................................................................
2) Form, Schedule or Registration Statement No.:
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<PAGE> 2
AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
March 27, 1997
Dear Stockholder:
The Annual Meeting of Stockholders will be held at the Hess Office
Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on Wednesday, May 7,
1997, at 2:00 P.M., local time. The formal Notice of Annual Meeting and Proxy
Statement, which are contained in the following pages, outline the action to be
taken by the stockholders at the meeting.
You are cordially invited to attend this meeting. The Hess Office Building
may be reached, if you travel by car, from Exits 127 (northbound) and 130
(southbound) of the Garden State Parkway or Exit 11 of the New Jersey Turnpike
or, if you travel by train, from the Metropark station in Iselin, New Jersey.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. ACCORDINGLY, YOU ARE REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR COOPERATION WILL BE
APPRECIATED.
Sincerely yours,
<TABLE>
<S> <C>
/s/ John B. Hess /s/ W. S. H. Laidlaw
Chairman of the Board President and
and Chief Executive Officer Chief Operating Officer
</TABLE>
/s/ Leon Hess
Chairman of the Executive Committee
<PAGE> 3
AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 7, 1997, AT 2:00 P.M.
To the Stockholders:
The Annual Meeting of Stockholders of Amerada Hess Corporation will be held
at the Hess Office Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on
Wednesday, May 7, 1997, at 2:00 P.M., local time, for the following purposes:
1. To elect five directors for the ensuing three-year term (pages 1 to 16
of Proxy Statement);
2. To act upon the ratification of the selection by the Board of
Directors of Ernst & Young LLP as independent auditors (page 17); and
3. To transact any other business which properly may be brought before
the meeting.
All stockholders are cordially invited to attend, although only
stockholders of record at the close of business on March 17, 1997 will be
entitled to vote at the meeting.
By order of the Board of Directors,
Carl T. Tursi
Secretary
New York, New York
March 27, 1997
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF PROXY,
SO THAT IF YOU ARE UNABLE TO ATTEND THE MEETING YOUR SHARES MAY NEVERTHELESS BE
VOTED.
<PAGE> 4
AMERADA HESS CORPORATION
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Amerada Hess
Corporation (the "Corporation") for use at the Annual Meeting of Stockholders
(the "Annual Meeting") on May 7, 1997, at 2:00 P.M., local time.
The Corporation's principal executive office is located at 1185 Avenue of
the Americas, New York, New York 10036. The approximate date on which this Proxy
Statement is first being sent to stockholders is March 27, 1997.
You may revoke the proxy at any time prior to its use by delivering a
written notice to the Secretary of the Corporation, by executing a later-dated
proxy in a form permitted under Delaware law, or by attending the Annual Meeting
and voting in person. Proxies in the form enclosed, unless revoked prior to the
closing of polls for each matter upon which the stockholders will be entitled to
vote at the Annual Meeting, will be voted at the Annual Meeting in accordance
with the specifications made by you thereon or, in the absence of such
specifications, for the election of directors nominated herein and the proposal
to ratify the selection of Ernst & Young LLP ("Ernst & Young") as independent
auditors for the fiscal year ending December 31, 1997.
Holders of record of Common Stock, par value $1.00 per share ("Common
Stock"), of the Corporation at the close of business on March 17, 1997 will be
entitled to vote at the Annual Meeting. Each share of Common Stock will be
entitled to one vote. On March 17, 1997, there were 92,856,305 shares of Common
Stock outstanding. There are no other voting securities of the Corporation
outstanding. A majority of the outstanding shares of Common Stock, present in
person or represented by proxy, will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence of a quorum for the transaction of business.
ELECTION OF DIRECTORS
At the Annual Meeting, five directors are to be elected to serve for a term
of three years and until their successors are elected and qualified. It is
intended that proxies will be voted for the nominees set forth herein. Election
of directors shall be had by a plurality of the votes cast. Accordingly,
abstentions and broker non-votes will not affect tabulation of the vote for
directors. Although it is expected that all candidates will be able to serve, if
one or more are unable to do so, the proxy holders will vote the proxies for the
remaining nominees and for substitute nominees chosen by the Board of Directors
unless it reduces the number of directors to be elected.
The following table presents information as of February 1, 1997 on the
nominees for election as directors of the Corporation and the directors
continuing in their respective terms of office:
1
<PAGE> 5
NOMINEES FOR DIRECTOR
Class III
For Three-Year Term Expiring in 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- --------------------------------------- --------- ---------------------------
<S> <C> <C> <C> <C>
Peter S. Hadley........ Former Senior Vice President, 68 1991 --
Metropolitan Life Insurance
Company
John B. Hess........... Chairman of the Board and Chief 42 1978 --
Executive Officer
William R. Johnson..... President and Chief Operating 48 1996 Cincinnati Financial
Officer and Director, Corporation
H.J. Heinz Company
John Y. Schreyer....... Executive Vice President and 57 1990 --
Chief Financial Officer
William I. Spencer..... Independent Consultant; 79 1982 --
Former President and Chief
Administrative Officer,
Citicorp and Citibank, N.A.
</TABLE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
Class I
Term Expiring in 1998
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- --------------------------------------- --------- ---------------------------
<S> <C> <C> <C> <C>
Marco B. Bianchi....... Senior Vice President 57 1988 --
Nicholas F. Brady...... Chairman, Darby Overseas 66 1994 Christiana Companies, Inc.
Investments, Ltd. (investment H.J. Heinz Company
firm); Director or trustee of 27
Former Secretary of the Templeton mutual funds
United States Department of
the Treasury;
Former Chairman of the Board,
Dillon, Read & Co. Inc.
(investment banking firm)
J. Barclay Collins II.. Executive Vice President and 52 1986 Dime Bancorp, Inc.
General Counsel
Leon Hess.............. Chairman of the Executive 82 1968 --
Committee; Former Chairman of
the Board and Chief Executive
Officer of the Corporation
Thomas H. Kean......... President, Drew University; 61 1990 ARAMARK Corporation
Former Governor of the Bell Atlantic Corporation
State of New Jersey Beneficial Corporation
Fiduciary Trust Company
International
United HealthCare
Corporation
H. W. McCollum......... Chairman of the Finance 83 1969 --
Committee
</TABLE>
2
<PAGE> 6
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE -- (Continued)
Class II
Term Expiring in 1999
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- --------------------------------------- --------- ---------------------------
<S> <C> <C> <C> <C>
Edith E. Holiday....... Attorney; Former Assistant to 44 1993 Beverly Enterprises, Inc.
the President of the United Hercules, Incorporated
States and Secretary of the H.J. Heinz Company
Cabinet; Director or trustee of
Former General Counsel, 15 Templeton mutual
United States Department of funds
the Treasury
W. S. H. Laidlaw....... President and Chief Operating 41 1994 Premier Oil plc
Officer
Roger B. Oresman....... Consulting Partner, 76 1969 --
Milbank, Tweed,
Hadley & McCloy
(attorneys)
Robert N. Wilson....... Vice Chairman of the Board of 56 1996 United States Trust
Directors, Johnson & Johnson Corporation
Robert F. Wright....... Former President and Chief 71 1981 --
Operating Officer of the
Corporation
</TABLE>
All of the nominees and directors named above have held substantially the
positions or former positions indicated for the past five years, except as
described below. On May 3, 1995, Mr. Leon Hess resigned as Chairman of the Board
and Chief Executive Officer, Mr. John B. Hess, formerly Senior Executive Vice
President of the Corporation, was elected Chairman of the Board and Chief
Executive Officer, and Mr. Laidlaw, formerly an Executive Vice President of the
Corporation and Managing Director of its wholly-owned British subsidiary,
Amerada Hess Limited, was elected President and Chief Operating Officer of the
Corporation. Mr. Brady served as Secretary of the United States Department of
the Treasury from 1988 to 1993. Mr. Johnson served in various senior executive
positions at H.J. Heinz Company prior to his election as its President and Chief
Operating Officer in 1996. From 1990 until 1993, Ms. Holiday served as an
assistant to President Bush and prior thereto in several senior positions in the
United States Department of the Treasury.
Leon Hess is John B. Hess' father. Leon Hess may be deemed to be a control
person of the Corporation by virtue of his stock ownership. See "Ownership of
Equity Securities by Management."
The Audit Committee of the Board of Directors is composed of William I.
Spencer, Chairman, Edith E. Holiday and Thomas H. Kean. The Audit Committee met
four times in 1996, once with respect to 1995 business and three times with
respect to 1996 business. The Audit Committee reviews the audit plan developed
by the Corporation's independent auditors in connection with their annual audit
of the Corporation's financial statements, the results of audits performed by
the Corporation's independent auditors, the independent auditors' charges to the
Corporation, the response of management of the Corporation to management letters
issued by the Corporation's independent auditors, current accounting rules and
changes therein, the operations of the Corporation's internal audit department,
the Corporation's audited financial statements and the implementation of the
Corporation's Business Practice Guide covering compliance with applicable laws
and Corporation policy. The Audit Committee also recommends the selection of
independent auditors to the Board of Directors each year.
The Board of Directors' Compensation Committee (the "Compensation
Committee") is composed of Nicholas F. Brady, Chairman, Peter S. Hadley and
William I. Spencer. The Compensation Committee, which met three times in 1996,
approves and administers the Corporation's compensation
3
<PAGE> 7
policies for executive officers and approves the compensation of the Chief
Executive Officer and in connection therewith makes awards of restricted Common
Stock and book value appreciation units under the Corporation's Executive
Long-Term Incentive Compensation and Stock Ownership Plan. The Compensation
Committee also is authorized to make awards of options, restricted stock and
other stock and cash compensation permitted under the 1995 Long-Term Incentive
Plan.
The Employee Benefits and Pension Committee of the Board of Directors is
composed of William I. Spencer, Chairman, Peter S. Hadley, Edith E. Holiday,
Thomas H. Kean and Roger B. Oresman. This Committee, which met once in 1996,
oversees the Corporation's benefit plans. It recommends to the Board of
Directors asset allocation targets and investment managers for the Employees'
Pension Plan and appoints investment managers for the Employees' Savings and
Stock Bonus Plan.
In August 1996, the Board of Directors established the Directors and Board
Affairs Committee and elected as members Nicholas F. Brady, Chairman, John B.
Hess, Leon Hess, Edith E. Holiday and Thomas H. Kean. This Committee met twice
in 1996. It is responsible for reviewing the size and composition of the Board,
as well as appropriate board practices and procedures, board meeting content,
frequency and length, and the composition and function of committees of the
Board of Directors. This Committee also recommends for election as directors
qualified candidates identified through various sources. Stockholders may
suggest candidates by writing to the Secretary of the Corporation, including a
brief summary of each candidate's qualifications.
The Board of Directors met twelve times in 1996, and, except for Messrs.
McCollum and Johnson, each director attended at least 75% of the aggregate of
all Board of Directors' meetings and all meetings of committees of the Board of
Directors on which he or she served during 1996. Mr. Johnson was elected to the
Board in October 1996 and was unable to attend one of the two meetings following
his election because of a prior commitment.
CERTAIN TRANSACTIONS AND OTHER INFORMATION
The Corporation retained Milbank, Tweed, Hadley & McCloy, of which Mr.
Oresman is a consulting partner, to provide legal services in 1996. It is
expected that the Corporation's dealings with this firm will continue in 1997.
Mr. Leon Hess owns 11 1/2%, and owns a 50% equity interest in another
corporation which owns 34%, of the capital stock of Galaxie Corporation, of
which Southland Oil Co. ("Southland") is a wholly-owned subsidiary. From January
1, 1996 through February 28, 1997, the Corporation sold $3,811,000 of crude oil
to Southland at competitive market prices. In early 1997, the Corporation
entered into a settlement agreement terminating the contract under which the
Corporation sold such crude oil and paid Southland $576,000.
Mr. Leon Hess owns 50% of the capital stock of Mississippi Valley Gas
Company ("Mississippi Valley"), of which Mississippi Energies Inc. is a
wholly-owned subsidiary. Prior to 1996 the Corporation, Southland, Mississippi
Energies Inc. and Capitol Street Corporation, a wholly-owned subsidiary of
Galaxie Corporation, participated with unrelated third parties in the drilling
of two oil and gas development wells in Mississippi, in one of which the
above-named parties own undivided interests of 40%, 13%, 13% and 13%,
respectively, and in one of which they own undivided interests of 45%, 15%, 15%
and 15%, respectively. The Corporation also participated in the construction of
a gathering system in which the above-named parties own undivided interests of
40%, 13%, 13% and 13%, respectively. Pursuant to the terms of its
participations, the Corporation expended $37,000 for operating expenses in 1996
in connection with the operation of these wells. The Corporation sold its share
of natural gas produced from these wells during 1996 to Mississippi Valley for
$130,000. In June 1996, the Corporation sold its interest in these wells and the
gathering system to an unrelated third party. The Corporation believes that the
terms of its participation in each of these wells and the gathering system and
the prices and terms of its sales of natural gas production therefrom were at
least as favorable to it as those it would have received if all participants and
the purchaser of such natural gas production were unrelated third parties.
4
<PAGE> 8
In 1996, the Corporation sold petroleum products and charged storage fees
in an aggregate amount of $753,112 to Johnson & Johnson, of which Mr. Wilson is
Vice Chairman. These sales and charges were made at competitive market prices
pursuant to longstanding contractual relationships.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF COMPENSATION
The following table sets forth information on cash and other compensation
paid or accrued for each of the fiscal years ended December 31, 1996, 1995 and
1994 to the Chief Executive Officer during 1996 and the four most highly
compensated executive officers other than the Chief Executive Officer, for
services in all capacities to the Corporation and its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------------------- ----------
--------------------------------------- RESTRICTED SECURITIES
OTHER STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL ANNUAL AWARD(S)($) OPTIONS/ LTIP COMPENSATION($)
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)* ** SARS(#) PAYOUTS($) ***
- ------------------------ ---- --------- -------- ---------------- ----------- --------- ---------- ---------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------ ---- --------- -------- ---------------- ----------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John B. Hess,........... 1996 1,000,000 -- -- -- 105,000 -- 7,500
Chairman of the Board 1995 900,000 -- -- -- 149,000 -- 7,500
and Chief Executive 1994 735,000 -- -- 990,000 -- -- 7,500
Officer
W. S. H. Laidlaw,....... 1996 900,000 -- 39,250 -- 70,000 -- 7,500
President and Chief 1995 775,000 -- 798,837 -- 90,000 -- 7,500
Operating Officer 1994 575,000 -- 203,000 990,000 -- -- 7,500
J. Barclay Collins,..... 1996 650,000 -- -- -- 28,000 -- 7,500
Executive Vice 1995 600,000 -- -- -- 45,000 -- 7,500
President and 1994 550,000 -- -- 495,000 -- -- --
General Counsel
John Y. Schreyer,....... 1996 650,000 -- -- -- 28,000 -- 7,500
Executive Vice 1995 600,000 -- -- -- 45,000 -- 7,500
President and Chief 1994 550,000 -- -- 495,000 -- -- 7,500
Financial Officer
Marco B. Bianchi,....... 1996 525,000 -- 62,775 -- 9,500 -- 7,500
Senior Vice President 1995 500,000 -- 62,526 149,250 11,500 -- 7,500
1994 475,000 -- 63,336 247,500 -- -- 7,500
</TABLE>
- ---------------
* In connection with Mr. Laidlaw's overseas employment through May 3, 1995,
the Corporation made payments on behalf of Mr. Laidlaw to United Kingdom
taxing authorities equal to the difference between Mr. Laidlaw's actual
United Kingdom income tax liability and a notional United States income tax
on his compensation. These disbursements made in 1996 (for prior tax years)
and in 1994 (for 1994 and prior tax years), based on the average
dollar-sterling exchange rate for each such year, amounted to approximately
$39,250 and $179,000, respectively. Amounts withheld from Mr. Laidlaw's
salary exceeded disbursements to United Kingdom taxing authorities in 1995
by approximately $11,000. Amounts shown in 1995 for Mr. Laidlaw include
relocation allowances of $787,422 to defray moving expenses and anticipated
increased costs as a result of such relocation. The amounts shown for 1995
and 1994 for Mr. Laidlaw also include disbursements made in connection with
his use of an automobile. Amounts shown for Mr. Bianchi include a $60,000
housing allowance in each year made in connection with Mr. Bianchi's
relocation from Tulsa to New York as well as disbursements made in
connection with his use of an automobile.
** At December 31, 1996, the named executives each held shares of restricted
Common Stock, subject to vesting pursuant to the Corporation's Executive
Long-Term Incentive Compensation and Stock Ownership Plan, in the following
amounts and having the following aggregate market values at such date: Mr.
J. B. Hess, 20,000 shares, $1,157,500; Mr. Laidlaw, 20,000 shares,
$1,157,500; Mr. Collins, 10,000 shares, $578,750; Mr. Schreyer, 10,000
shares, $578,750 and Mr. Bianchi, 5,000
5
<PAGE> 9
shares, $289,375. At December 31, 1996, Mr. Bianchi also held 3,000 shares
of restricted Common Stock, subject to vesting under the Corporation's 1995
Long-Term Incentive Plan, having a market value of $173,625 at such date. To
the extent paid on the Corporation's Common Stock generally, dividends
accrue on shares of restricted stock and are held in escrow until vesting,
at which time they are paid, together with interest accrued thereon at
short-term market rates, to the named executives. In addition to the shares
of restricted stock awarded in 1994, the named executives were awarded
tandem book value appreciation units, which are subject to vesting pursuant
to this Plan together with related shares of restricted stock and which had
no value on the date of award, in the following amounts: Mr. J. B. Hess,
20,000 units; Mr. Laidlaw, 20,000 units; Mr. Collins, 10,000 units; Mr.
Schreyer, 10,000 units and Mr. Bianchi, 5,000 units. At December 31, 1996,
the named executives held book value appreciation units in the same
respective amounts, and having the following aggregate market values at such
date: Mr. J. B. Hess, $72,800; Mr. Laidlaw, $72,800; Mr. Collins, $36,400;
Mr. Schreyer, $36,400; and Mr. Bianchi, $18,200. Each book value
appreciation unit entitles the holder to a cash payment equal to the
increase, if any, in the book value per share of Common Stock over the
vesting period of the restricted stock.
*** Amounts shown in column (i) represent matching contributions of the
Corporation credited to the named executive officers under the Corporation's
Employees' Savings and Stock Bonus Plan.
6
<PAGE> 10
STOCK OPTIONS
In December 1996, the Compensation Committee granted non-qualified stock
options to certain officers and other employees under the Corporation's 1995
Long-Term Incentive Plan (the "Incentive Plan"), approved by the stockholders of
the Corporation at the Corporation's last annual meeting. These stock options
are not currently exercisable. No stock appreciation rights were granted in
1996. The following table sets forth information concerning individual grants of
stock options made under the Incentive Plan during the last fiscal year to each
of the named executive officers:
OPTION/SAR GRANTS IN LAST FISCAL YEAR*
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE VALUE($)**
(a) (b) (c) (d) (e) (f)
- ---------------------------------- ----------- ---------------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
John B. Hess,..................... 40,000 6.4 58.75 12/04/06 814,000
Chairman of the Board and 65,000 10.3 64.62 12/04/06 1,173,250
Chief Executive Officer
W. S. H. Laidlaw,................. 25,000 4.0 58.75 12/04/06 508,750
President and Chief Operating 45,000 7.2 64.62 12/04/06 812,250
Officer
J. Barclay Collins,............... 10,000 1.6 58.75 12/04/06 203,500
Executive Vice President 18,000 2.9 64.62 12/04/06 324,900
John Y. Schreyer,................. 10,000 1.6 58.75 12/04/06 203,500
Executive Vice President 18,000 2.9 64.62 12/04/06 324,900
Marco B. Bianchi,................. 3,500 0.6 58.75 12/04/06 71,225
Senior Vice President 6,000 1.0 64.62 12/04/06 108,300
</TABLE>
- ---------------
* Stock options awarded by the Compensation Committee effective December 4,
1996 become fully exercisable on December 4, 1997, except that options may
become exercisable earlier in full in cases of death, disability, normal
retirement or change of control (as described in the Incentive Plan). At the
discretion of the Compensation Committee, upon early retirement of an
awardee, options not then exercisable may become exercisable in proportion to
the amount of time elapsed in the non-exercisability period to the early
retirement date. Such options remain exercisable until December 4, 2006,
except in cases of death, disability, retirement or other termination of
employment, in which case options remain exercisable only for certain
specified periods thereafter. If an awardee's employment terminates prior to
such options becoming exercisable, such options will be forfeited.
** The Grant Date Present Values shown in the above table have been determined,
as permitted under applicable rules of the Securities and Exchange
Commission, using the Black-Scholes option pricing model. This model, like
all pricing models, requires certain assumptions, and therefore the amounts
shown should not necessarily be considered indicative of the present value of
the amounts that may actually be realized. The following assumptions were
made for purposes of this valuation: expected life of seven years for each
option; volatility of 21.5% (based on historical volatility of the Common
Stock over the seven-year period ending December 31, 1996); risk-free rate of
return of 5.98%; and dividend yield of 1.0%.
7
<PAGE> 11
The following table sets forth information as to the named executives
regarding the values of unexercised options under the Incentive Plan as of the
end of the last fiscal year:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS/ IN-THE-MONEY
ACQUIRED ON VALUE SARS AT FY-END(#) OPTIONS/SARS AT FY-END($)
NAME EXERCISE(#) REALIZED($) (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
(a) (b) (c) (d) (e)
- ------------------------------ ----------- ----------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
John B. Hess,................. -- -- 149,000/105,000 509,375/0
Chairman of the Board and
Chief Executive Officer
W. S. H. Laidlaw,............. -- -- 90,000/70,000 306,250/0
President and Chief
Operating Officer
J. Barclay Collins,........... -- -- 45,000/28,000 153,125/0
Executive Vice President
John Y. Schreyer,............. -- -- 45,000/28,000 153,125/0
Executive Vice President
Marco B. Bianchi,............. -- -- 11,500/9,500 40,313/0
Senior Vice President
</TABLE>
RETIREMENT PLANS
The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age under the Corporation's
Employees' Pension Plan (the "Pension Plan"), a qualified defined benefit
pension plan, as well as a nonqualified supplemental plan that provides
benefits, paid from the general assets of the Corporation, that would otherwise
be paid to participants under the Pension Plan but for certain limitations on
qualified plan benefits and compensation imposed by the Internal Revenue Code of
1986, as amended (the "Code"), based on remuneration that is covered under the
Pension Plan and supplemental plan and years of service:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 500,000 120,000 160,000 200,000 240,000 280,000
600,000 144,000 192,000 240,000 288,000 336,000
700,000 168,000 224,000 280,000 336,000 392,000
800,000 192,000 256,000 320,000 384,000 448,000
900,000 216,000 288,000 360,000 432,000 504,000
1,000,000 240,000 320,000 400,000 480,000 560,000
1,200,000 288,000 384,000 480,000 576,000 672,000
</TABLE>
A participant's remuneration covered by the Pension Plan and the
supplemental plan is twelve times the participant's average monthly compensation
(as reported on an annual basis in column (c) of the Summary Compensation Table)
in the 36 consecutive months (or the number of consecutive months of employment,
if fewer) of highest compensation during the 60 months immediately preceding the
participant's retirement date. Benefits shown are computed as a straight life
annuity beginning at age 65 and do not reflect the offset for a portion of
social security benefits as required under the Pension Plan. Covered
compensation for the named executives as of December 31, 1996 was: Mr. J. B.
Hess: $878,333; Mr. Laidlaw: $750,000; Mr. Collins: $600,000; Mr. Schreyer:
$600,000; and Mr. Bianchi: $500,000.
The years of credited service for the named executives under the Pension
Plan and, except for Mr. Schreyer, the supplemental plan as of February 1, 1997
are as follows: J. B. Hess, 19 years;
8
<PAGE> 12
W. S. H. Laidlaw, 15 years; J. B. Collins, 12 years; J. Y. Schreyer, 6 years;
and M. B. Bianchi, 24 years. As of February 1, 1997, Mr. Schreyer had 32 years
of credited service under the supplemental plan pursuant to a determination of
the Compensation Committee, which gave Mr. Schreyer credit for 26 years of prior
service with his prior employer for purposes of determining benefits payable
under the supplemental plan. However, retirement benefits payable to Mr.
Schreyer in connection with his prior employment will be deducted from benefits
payable under the supplemental plan.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Mr. Schreyer has an agreement with the Corporation which provides credit
for prior service and determines benefits payable under the Corporation's
nonqualified supplemental retirement plan, as more fully described above under
"Retirement Plans".
Awards granted to employees under the Incentive Plan, including the named
executive officers, are subject to accelerated vesting and cash-out upon the
occurrence of a Change of Control, as defined in the Incentive Plan.
DIRECTORS' COMPENSATION
Each director who is not an employee of the Corporation or any of its
subsidiaries receives an annual fee of $50,000 for membership on the Board of
Directors and a fee of $1,000 for each Board of Directors' and Stockholders'
meeting attended. Each such director receives an additional annual fee of $4,000
for membership on each committee of the Board of Directors on which such
director serves and a fee of $1,000 for each committee meeting attended, except
that each such director who is a member of the Executive Committee receives an
additional annual fee of $75,000, but no fee for each meeting attended. The
members of the Executive Committee are Leon Hess, Chairman, Nicholas F. Brady,
John B. Hess, Thomas H. Kean, W. S. H. Laidlaw, John Y. Schreyer, William I.
Spencer and Robert F. Wright. Messrs. L. Hess, J. B. Hess, Laidlaw and Schreyer
are employees of the Corporation and receive no additional compensation for
serving on any committee of the Board of Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation is
responsible for approving and administering the Corporation's compensation
policies for executive officers and approving the compensation of the Chief
Executive Officer of the Corporation. The following report was prepared by the
Compensation Committee after its meeting on December 4, 1996 and the
Compensation Committee reported to the Board of Directors at its meeting held
March 5, 1997.
Executive Compensation Policies. The Corporation's executive compensation
policies are designed to attract and retain executives and motivate them to
achieve the Corporation's business goals through a combination of cash and
stock-based compensation. The key elements of executive compensation principally
consist of cash salary, occasional discretionary cash bonuses, stock option
awards, and to a lesser extent, restricted stock awards. The Compensation
Committee also takes into account the full compensation package afforded to each
executive, including retirement benefits and other benefits generally available
to all eligible employees such as the Corporation's matching contributions under
the Employees' Savings and Stock Bonus Plan and group life insurance and health
benefits. In 1995 and 1996, independent consultants were retained to study the
Corporation's compensation policy and develop strategies to relate a greater
portion of compensation to performance. The Incentive Plan, discussed below, was
formulated as part of this ongoing study.
Cash Compensation -- Salary. Cash salary traditionally has been the
primary element of executive compensation. In determining salary levels for
executive officers, the Compensation Committee considers the following
subjective and quantitative factors:
- job level and responsibility;
9
<PAGE> 13
- recent corporate performance, including results of operations, success in
implementing corporate strategy and long-term goals and development of
future strategies;
- individual performance, particularly as related to special projects or
for extraordinary contributions; and
- an objective of keeping total cash compensation at the 75th percentile or
better as shown in a survey of a group of companies compiled by an
independent consultant, which for 1996 comprised at least 54 industrial
companies with sales in excess of $1.5 billion (which group included
three companies also included in Standard & Poor's Oil (Domestic
Integrated) Stock Index discussed under "Performance Graph"), in
recognition of the Corporation's need to remain competitive in attracting
and retaining talented executives to work as part of a lean management
team functioning in a demanding corporate and market environment.
The salary increase for executive officers, including the named executive
officers, averaged 6.26% in 1996. Salary increases, including increases in
respect of promotions, on an annualized basis over the preceding five years
ending in 1996 averaged 4.54%.
Cash Compensation -- Bonus. Cash bonuses generally have not been paid, but
have occasionally been utilized to reward extraordinary effort by an individual
or performance that was particularly beneficial to the Corporation.
Although cash bonuses are granted on a discretionary basis primarily to
reward individual contribution and thus are not necessarily tied to any
particular measure or level of corporate performance, such bonuses have
generally been awarded more liberally following periods of superior performance
by the Corporation. No cash bonuses were paid to executive officers in 1996.
However, the Compensation Committee is currently reviewing the feasibility of a
performance-based cash incentive program in order to relate a greater portion of
total cash compensation to performance.
Incentive Plan. The Incentive Plan was developed to align senior
management's compensation more closely with the interests of stockholders. The
guiding principle was to develop a program that would be:
- stock-based
- performance-oriented
- accounting and cost efficient
- competitive with that of other major companies
- clear, concise and understandable to stockholders
The Incentive Plan was adopted by the Board of Directors at its December
1995 board meeting and approved by stockholders at the last annual meeting. The
Incentive Plan is a broad-based plan that provides the Compensation Committee
with authority to grant various types of stock-based and other compensation,
including performance awards, stock options, restricted stock, deferred stock,
dividend equivalents and stock appreciation rights. The Compensation Committee
believes that a plan of this type affords the Compensation Committee the
flexibility to design compensation packages that provide appropriate
remuneration to attract and retain talented executives, while at the same time
providing incentives to maximize shareholder value. The Incentive Plan initially
reserved for issuance 4,500,000 shares, of which 2,861,500 remain available for
future awards.
Awards under the Incentive Plan to executive officers have been primarily
option-based, as the Committee determined this would align executive and
stockholder interests most closely, and would be most accounting efficient in
that no charge to earnings is recorded upon the grant of stock options. The
Compensation Committee's reliance on stock options reflects a growing trend
toward greater use of stock options by large industrial companies.
10
<PAGE> 14
In 1996, the Compensation Committee awarded stock options for an aggregate
of 628,500 shares, including 301,500 shares to executive officers. Except for
one award, in the case of each stock option award, options constituting 40% of
the total present value of the awards were made exercisable at the market price
of the Corporation's Common Stock on the date of grant, and options constituting
60% of such value were made exercisable at a 10% premium to the market price.
The level of stock option awards to the five most highly compensated executive
officers were determined using substantially the same methodology as used for
the Chief Executive Officer, discussed below. The Compensation Committee's
intention in granting premium options was to provide greater incentive for
maximizing shareholder value, since the executive realizes the full value of the
award only in the event of significant appreciation in stock price. The
performance-based nature of the options will permit any compensation paid in
respect of these options to any executive in a fiscal year in excess of $1
million to be deductible for Federal income tax purposes.
A total of 19,000 shares of restricted stock vesting in three years were
awarded under the Incentive Plan during 1996, of which 10,000 shares were
awarded to an executive officer in connection with his hiring.
Restricted Stock Plan. Under the Corporation's Executive Long-Term
Incentive Compensation and Stock Ownership Plan (the "Restricted Stock Plan")
approved by stockholders of the Corporation in 1981, restricted shares of the
Corporation's Common Stock and book value appreciation units (each representing
the increase, if any, in the Corporation's book value per share of Common Stock
over the vesting period) have been awarded from time to time to attract and
retain key management and executive employees and to provide incentives for such
employees to work for the Corporation's long-term growth and return to
stockholders. However, since the adoption of the Incentive Plan, the Committee
has not utilized the Restricted Stock Plan for executive officers. In selecting
employees to participate in the Restricted Stock Plan and in determining the
amount of an award to be granted, the Compensation Committee has considered a
number of subjective factors, including the functions and responsibilities of
the employee, the employee's past and potential contribution to the
profitability and growth of the Corporation, the value of the employee's
services, and the amount and timing of prior awards. The Restricted Stock Plan
originally had 1,500,000 shares of Common Stock and an equal number of book
value appreciation units available for grant; at year-end 1996, the Restricted
Stock Plan had 217,750 shares of Common Stock and 293,750 book value
appreciation units available for grant. The Restricted Stock Plan will expire in
1997. Awards of 76,000 shares of restricted stock, vesting in three years, were
made to non-executive officers and other employees in 1996. No book value
appreciation units were awarded in 1996.
Other Benefit Plans. The Corporation has adopted certain broad-based
employee benefit plans in which executive officers are permitted to participate
on the same terms as other eligible employees of the Corporation, subject to
applicable limits imposed on contributions and benefits under the Code. In
addition to group life insurance and health benefit plans, the Corporation has
adopted the Employees' Savings and Stock Bonus Plan, approved by stockholders in
1981, under which participants can elect to invest on a pre-tax or after-tax
basis up to 10% of salary in seven funds, one of which invests in Common Stock,
and the Corporation provides matching contributions up to 5% of salary for each
participant, all of which are invested in Common Stock. The Corporation believes
that this matching structure helps to align the financial interests of all
participants with those of stockholders to encourage them to work toward
enhancing the value of the Common Stock.
In 1995 the Corporation provided a relocation allowance to Mr. Laidlaw. The
Corporation has also provided a housing allowance to Mr. Bianchi since his
relocation from Tulsa to New York. These allowances were made as an inducement
to relocate and to defray moving expenses as well as anticipated increased costs
associated with living in the New York metropolitan area.
Compensation of the Chief Executive Officer. Mr. John B. Hess' salary for
1996 was established by reference to a comparison of total cash compensation of
the chief executive officer of eight petroleum companies, including six
companies in the Corporation's peer group, the Standard & Poor's Oil
11
<PAGE> 15
(Domestic Integrated) Stock Index, and by reference to a similar comparison in a
survey of industrial companies with revenues in excess of $1.5 billion. Mr. John
B. Hess' salary for 1996 was below the total cash compensation at the 75th
percentile for the chief executive officer in both surveys.
In making awards of stock options to Mr. John B. Hess under the Incentive
Plan in December 1996, as well as awards to the other named executive officers,
the Compensation Committee did not rely on any particular measure of the
Corporation's past performance to determine award levels, but rather on
comparative analyses of peer compensation in order to gauge competitive levels
of performance-based compensation and with the objective to provide incentives
to management to improve returns to stockholders. The Compensation Committee
relied on data compiled by an independent consultant, the primary source of
which was a survey of 350 industrial companies with revenues comparable to those
of the Corporation. The Compensation Committee's objective was to grant a
combination of market and premium options, the total present value of which
(based on expected option values derived from the consultant's pricing model)
would provide long-term incentive compensation at the 75th percentile of such
compensation for chief executive officers in the survey. Based on this
methodology, the Compensation Committee awarded Mr. John B. Hess 40,000 shares
at an exercise price of $58.75, the closing market price on the grant date of
December 4, 1996, and 65,000 shares at an exercise price of $64.62, or 110% of
such grant date price.
The Compensation Committee concluded that the total of Mr. John B. Hess'
cash salary and the grant date present value of his long-term incentive
compensation was reasonable compared with that of his peers. Mr. John B. Hess'
1996 total compensation was approximately 23% below the 75th percentile total
compensation for chief executive officers in the last survey mentioned above.
Moreover, in keeping with the Compensation Committee's objective to better align
senior management's compensation more closely with stockholders' interests,
approximately 67% of Mr. John B. Hess' 1996 total compensation as shown in the
Summary Compensation Table and Option Grants Table is performance-based.
Nicholas F. Brady
Peter S. Hadley
William I. Spencer
12
<PAGE> 16
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return, assuming reinvestment of dividends, on the Corporation's Common Stock
with the cumulative total return, assuming reinvestment of dividends, of the
Standard & Poor's 500 Stock Index, which includes the Corporation, and the
cumulative total return, assuming reinvestment of dividends, of Standard &
Poor's Oil (Domestic Integrated) Stock Index, a published industry index which
includes the Corporation, as of each December 31 over a five-year period
commencing on December 31, 1991 and ending on December 31, 1996:
TOTAL SHAREHOLDER RETURNS
(DIVIDENDS REINVESTED)
YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
S&P OIL (DOMES-
MEASUREMENT PERIOD AMERADA HESS S&P 500 STOCK TIC INTEGRATED)
(FISCAL YEAR COVERED) CORPORATION INDEX STOCK INDEX
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 98.18 107.62 102.13
1993 97.48 118.46 107.60
1994 99.84 120.03 112.90
1995 117.38 165.13 128.53
1996 129.58 203.05 162.55
</TABLE>
13
<PAGE> 17
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the most recent practicable date,
information as to the ownership of more than 5% of any class of the
Corporation's voting securities by beneficial owners known by the Corporation to
hold more than 5% of any such class:
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP(a) OF CLASS
- ------------------------ ----------------------------------- ------------ --------
<S> <C> <C> <C>
Common Stock............ Leon Hess 11,830,375(b) 12.7
c/o Amerada Hess Corporation
1185 Avenue of the Americas
New York, New York 10036
Common Stock............ FMR Corp. 7,333,331(c) 7.87
Edward C. Johnson 3d
Abigail P. Johnson
c/o FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ---------------
(a) The information in the above table and in the notes thereto was
obtained, with respect to FMR Corp., from the Schedule 13G filed with the
Securities and Exchange Commission in February 1997 by FMR Corp. Information
with respect to Mr. Leon Hess is as of February 1, 1997 and with respect to FMR
Corp. is as of December 31, 1996.
(b) Mr. Leon Hess has sole voting and dispositive power over these shares.
(c) This amount includes 419,960 shares as to which such beneficial owner
has sole voting power, 11,400 shares as to which it has shared voting power,
7,321,931 shares as to which it has sole dispositive power and 11,400 shares as
to which it has shared dispositive power. FMR Corp. controls Fidelity Management
& Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp. and a
registered investment adviser, which is the beneficial owner of 6,730,871 shares
of Common Stock of the Corporation as a result of acting as investment adviser
to various registered investment companies. FMR Corp. also controls Fidelity
Management Trust Company, a wholly-owned bank subsidiary which is the beneficial
owner of 556,460 shares of Common Stock of the Corporation.
Members of the Edward C. Johnson 3d family and trusts for their benefit are
the predominant owners of Class B shares of Common Stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. Mr. Johnson 3d
owns 12.0% and Abigail Johnson owns 24.5% of the aggregate outstanding voting
stock of FMR Corp. Mr. Johnson 3d is Chairman of FMR Corp. and Abigail P.
Johnson is a Director of FMR Corp. Members of the Johnson family, through their
ownership of voting common stock and the execution of a shareholders' voting
agreement among the Johnson family group and all other Class B shareholders, may
be deemed, under the Investment Company Act of 1940, to form a controlling group
with respect to FMR Corp. The number of shares reported in the table above with
respect to such beneficial owner includes 31,400 shares owned directly by Mr.
Johnson or in Johnson family trusts. Mr. Johnson has sole voting and dispositive
power over 20,000 shares, and shared voting and dispositive power over 11,400
shares.
14
<PAGE> 18
Of the shares reported in the table above with respect to such beneficial
owner, 14,600 shares are beneficially owned by Fidelity International Limited
("FIL"), a Bermudian joint stock company and an investment adviser to various
investment companies and certain institutional investors. FIL has sole voting
and dispositive power over these shares. A partnership controlled by Mr. Edward
C. Johnson 3d and members of his family owns shares of FIL stock having 47.22%
of the voting power of FIL voting stock. Mr. Johnson 3d is also the chairman of
FIL. FIL currently operates as an entity independent of FMR Corp. and Fidelity.
FMR Corp. and FIL are of the view that they are not acting as a group for
purposes of Section 13(d) under the Securities Exchange Act of 1934 and that
they are not otherwise required thereunder to attribute to each other securities
beneficially owned by each other. However, FMR Corp. made its 13G filing on a
voluntary basis as if all of the shares are beneficially owned by FMR Corp. and
FIL on a joint basis.
OWNERSHIP OF EQUITY SECURITIES BY MANAGEMENT
The table below sets forth as to each director and named executive officer,
and all directors and executive officers as a group, information regarding their
ownership of equity securities of the Corporation on February 1, 1997, except as
otherwise noted. The persons listed below each have sole voting and investment
power as to all shares indicated except as set forth in the footnotes to the
table. Where no information appears in the column "Percent of Outstanding Shares
of Common Stock Owned," the securities held represent less than one percent of
the Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
OWNERSHIP OF SHARES OF
COMMON COMMON
NAME STOCK(a) STOCK OWNED
---- ------------ -----------
<S> <C> <C>
Marco B. Bianchi....................................... 31,191 --
Nicholas F. Brady...................................... 1,000 --
J. Barclay Collins II.................................. 55,282 --
Peter S. Hadley........................................ 1,046(b) --
John B. Hess........................................... 1,704,514(c) 1.8
Leon Hess.............................................. 9,646,471 10.4
2,183,904(d) 2.3
Edith E. Holiday....................................... 1,000 --
William R. Johnson..................................... -- --
Thomas H. Kean......................................... 1,000 --
W. S. H. Laidlaw....................................... 152,152(e) --
H. W. McCollum......................................... 93,197 --
Roger B. Oresman....................................... 72,584(f) --
John Y. Schreyer....................................... 70,293 --
William I. Spencer..................................... 500 --
Robert N. Wilson....................................... 1,700 --
Robert F. Wright....................................... 120,089 --
All directors and executive officers as a group........ 14,320,862 15.3
</TABLE>
- ---------------
(a) These figures include 1,666 shares vested in the name of Mr. Bianchi,
281 shares vested in the name of Mr. Collins, 10,909 shares vested in
the name of Mr. J. B. Hess, 5,152 shares vested in the name of Mr.
Laidlaw, 7,678 shares vested in the name of Mr. McCollum, 2,293 shares
vested in the name of Mr. Schreyer, and 51,448 shares vested for all
executive officers and directors as a group under the Corporation's
Employees' Savings and Stock Bonus Plan, as to which these individuals
and the group have investment power but generally do not have voting
power, except with respect to shares purchased with each such
individual's own contributions, which will be voted by the plan trustee
in accordance with such individual's written instructions; and 5,000
shares held in escrow under the Restricted Stock Plan and 3,000 shares
held in escrow under the Incentive Plan for Mr. Bianchi, 10,000 shares
held in escrow under the Restricted Stock Plan for Mr. Collins, 20,000
shares held in escrow under
15
<PAGE> 19
said Plan for Mr. J. B. Hess, 20,000 shares held in escrow under said
Plan for Mr. Laidlaw, 10,000 shares held in escrow under said Plan for
Mr. Schreyer, and 91,000 shares held in escrow under said Plan and
30,000 shares held in escrow under the Incentive Plan for all executive
officers and directors as a group, as to which these individuals and the
group have voting power but not investment power. These amounts also
include shares underlying options to purchase Common Stock of the
Corporation, exercisable within 60 days of the date as of which this
information is provided, awarded under the Incentive Plan in the
following amounts: Mr. Bianchi, 11,500 shares, Mr. Collins, 45,000
shares, Mr. John B. Hess, 149,000 shares, Mr. Laidlaw, 90,000 shares,
Mr. Schreyer, 45,000 shares and all executive officers and directors as
a group, 411,000 shares. Holders of stock options do not have the right
to vote or any other right of a stockholder with respect to shares of
Common Stock underlying such options until such options are exercised.
(b) Mr. Hadley holds these shares jointly with his wife and shares voting
and investment power.
(c) This figure includes 1,280,094 shares held by a family corporation, the
preferred stock of which is held by a trust of which Mr. J. B. Hess is
trustee and 33 1/3% of the common stock of which is owned by Mr. J. B.
Hess. The preferred stock of such corporation has 99% of the total
voting power of all classes of stock of such corporation. As trustee Mr.
J. B. Hess has voting power and investment power with respect to such
preferred stock. Mr. J. B. Hess' mother is the beneficiary of this trust
and Mr. Leon Hess has a remainder interest therein. This figure also
includes 64,934 shares held by a trust for the benefit of Mr. J. B. Hess
and his children, of which Mr. J. B. Hess is trustee.
(d) This figure includes 175,218 shares held by five corporations
(including that referred to in note (e) below) of which Mr. Leon Hess is
an officer, director and owner of voting preferred stock having at least
80% of the total voting power of all classes of stock and 26,186 shares
held by five trusts of which Mr. Leon Hess is trustee. It also includes
1,982,500 shares held by Hess Foundation, Inc. of which Mr. Leon Hess is
an officer and a director. It excludes 107,286 shares held by Capitol
Street Corporation, in which Mr. Hess indirectly owns an equity interest
as described above in "Certain Transactions and Other Information." Mr.
Hess disclaims beneficial ownership of such shares. Mr. Leon Hess'
address is in care of the Corporation, 1185 Avenue of the Americas, New
York, New York 10036.
(e) Mr. Laidlaw also owns the common stock of a corporation, the preferred
stock of which is owned by Mr. Leon Hess, which owns 35,000 shares of
Common Stock. The preferred stock has more than 92% of the total voting
power of all classes of stock of this corporation.
(f) This figure includes 62,457 shares held in trusts of which Mr. Oresman
is a co-trustee and with respect to which he has shared voting and
investment power.
16
<PAGE> 20
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Based on the recommendation of its Audit Committee, the Board of Directors
has selected the firm of Ernst & Young as the independent auditors of the
Corporation for the fiscal year ending December 31, 1997. Ernst & Young has
acted for the Corporation in such capacity since November 1, 1971. The Board
proposes that the stockholders ratify such selection at the Annual Meeting.
If the stockholders do not ratify the selection of Ernst & Young, the
selection of independent auditors will be reconsidered by the Board of
Directors.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting and will be afforded the opportunity to make a statement if they desire
and will be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters to come before the
meeting. Should any unanticipated business properly come before the meeting, the
persons named in the enclosed form of proxy will vote in accordance with their
best judgment.
The cost of preparing and mailing this Proxy Statement and the accompanying
proxy and the cost of solicitation of proxies on behalf of the Board of
Directors will be borne by the Corporation. Solicitation will be made by mail.
Some personal solicitation may be made by directors, officers
and employees without special compensation, other than reimbursement for
expenses. In addition, D. F. King & Co. has been retained to aid in the
solicitation. The fees of said organization for this solicitation are not
expected to exceed $20,000, exclusive of expenses.
Proposals which stockholders wish to include in the Corporation's proxy
materials relating to the 1998 Annual Meeting of Stockholders must be received
by the Corporation no later than November 27, 1997.
It is important that proxies be returned promptly. Stockholders are urged
to date and sign the enclosed proxy and return it promptly in the accompanying
envelope.
By order of the Board of Directors,
CARL T. TURSI
Secretary
New York, New York
March 27, 1997
17
<PAGE> 21
PROXY
AMERADA HESS CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 7, 1997
The undersigned appoints JOHN B. HESS, W.S.H. LAIDLAW and LEON HESS, or any
of them, proxies, each with power of substitution, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Stockholders of Amerada
Hess Corporation to be held at its offices, 1 Hess Plaza, Route 9, Woodbridge,
New Jersey, on May 7, 1997, at 2:00 p.m., local time, and all adjournments
thereof, as directed on the reverse side of this card, and in their discretion,
upon any other matters which may properly come before the Meeting or any
adjournment thereof.
The undersigned hereby revokes any proxy heretofore given to vote said
shares, and hereby ratifies all that said proxies may do at the Meeting or any
adjournment thereof.
Please indicate on the reverse side of this card how your stock is to be
voted.
If not otherwise specified, shares will be voted FOR all nominees in Item 1
and FOR Proposal 2 on the reverse side of this card.
Receipt of Notice of the Meeting and of the Proxy Statement is hereby
acknowledged.
(Continued and to be signed on reverse side.)
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
Please mark
your votes as [X}
indicated in
this example.
The Board of Directors recommends
a vote FOR all nominees
1. Election of the following FOR WITHHOLD AUTHORITY WITHHOLD FOR THE FOLLOWING ONLY
nominees as Directors for all nominees to vote for all nominees (Write the name of the nominee(s) in the space below)
three-year term expiring
in 2000: P.S. Hadley, [ ] [ ] -----------------------------------------------------
J.B. Hess, W.R. Johnson,
J.Y. Schreyer, W.I. Spencer
The Board of Directors recommends
a vote FOR Proposal 2
2. Ratification of the selection FOR AGAINST ABSTAIN
of Ernst & Young LLP as
independent auditors for fiscal [ ] [ ] [ ]
year ending December 31, 1997.
-------|
|
|
SIGNATURES(S) ---------------------------------------------------------------------------- Date ---------------------------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
