<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
Amerada Hess Corporation
................................................................................
(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):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
3) Filing Party:
- --------------------------------------------------------------------------------
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
March 27, 2000
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 3,
2000, 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
can 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. THIS YEAR, MANY STOCKHOLDERS WILL
ALSO BE ABLE TO VOTE THEIR SHARES BY USING A TOLL-FREE TELEPHONE NUMBER OR OVER
THE INTERNET. PLEASE CHECK YOUR PROXY CARD TO SEE WHAT METHODS ARE AVAILABLE TO
YOU AND RELATED INSTRUCTIONS. YOUR COOPERATION WILL BE APPRECIATED.
Sincerely yours,
<TABLE>
<S> <C>
/s/ W.S.H. Laidlaw
/s/ John B. Hess
Chairman of the Board President and
and Chief Executive Officer Chief Operating Officer
</TABLE>
<PAGE> 3
AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 3, 2000, 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 3, 2000, 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
21 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 21); and
3. To approve the company's amended and restated 1995 long-term
incentive plan (pages 22 to 29); and
4. 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 13, 2000 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, 2000
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF PROXY,
OR TO USE OUR NEW METHODS OF TELEPHONE OR INTERNET VOTING, SO THAT IF YOU ARE
UNABLE TO ATTEND THE MEETING YOUR SHARES CAN BE VOTED.
<PAGE> 4
AMERADA HESS CORPORATION
PROXY STATEMENT
The enclosed proxy is solicited by the board of directors of Amerada Hess
Corporation for use at the annual meeting of stockholders on May 3, 2000, at
2:00 P.M., local time.
The company'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, 2000.
Holders of record of common stock of the company at the close of business
on March 13, 2000 will be entitled to vote at the annual meeting. Each share of
common stock will be entitled to one vote. On March 13, 2000, there were
90,620,405 shares of common stock outstanding. There are no other voting
securities of the company 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.
If you are a registered stockholder, this year for the first time you can
simplify your voting by doing so via the internet or calling the toll-free
number listed on the enclosed proxy card. Internet and telephone voting
information is provided on the proxy card. A control number, located on the
instruction sheet attached to the proxy card, is designated to verify a
stockholder's identity and allow the stockholder to vote the shares and confirm
that the voting instructions have been recorded properly. If you vote via the
internet or by telephone, there is no need to return a signed proxy card. You
may still vote by proxy by using the proxy card enclosed with this proxy
statement.
Proxies in the form enclosed will be voted at the annual meeting in
accordance with the specifications you make on the proxy. If you sign the proxy
card and do not specify how your shares are to be voted, your shares will be
voted:
- for the election of directors nominated herein,
- for the proposal to ratify the selection of Ernst & Young LLP as
independent auditors for the fiscal year ending December 31, 2000, and
- for the proposal to approve the adoption of the company's amended and
restated 1995 long-term incentive plan.
You may revoke the proxy at any time prior to its use by delivering a
written notice to the secretary of the company, by executing a later-dated proxy
in a form permitted under Delaware law, or by attending the annual meeting and
voting in person.
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. Directors
are elected by a plurality of the votes cast. Accordingly, abstentions and
broker non-votes will not affect tabulation of the vote for directors. It is
expected that all candidates will be able to serve. However, 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.
1
<PAGE> 5
The following table presents information as of February 1, 2000 on the
nominees for election as directors of the company and the directors continuing
in their respective terms of office:
NOMINEES FOR DIRECTOR
Class III
For three-year term expiring in 2003
<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, 71 1991 --
Metropolitan Life Insurance
Company
John B. Hess............. Chairman of the Board and 45 1978 --
Chief Executive Officer
William R. Johnson....... President and Chief Executive 51 1996 Cincinnati Financial
Officer and Director, Corporation
H.J. Heinz Company PNC Bank
John Y. Schreyer......... Executive Vice President and 60 1990 --
Chief Financial Officer
William I. Spencer....... Former President and Chief 82 1982 --
Administrative Officer,
Citicorp and Citibank, N.A.
</TABLE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
Class I
Term expiring in 2001
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
---- ----------------------- --- -------- -------------------
<S> <C> <C> <C> <C>
Nicholas F. Brady....... Chairman, Darby Overseas 69 1994 C2, Inc.
Investments, Ltd. H.J. Heinz Company
(investment firm); Director or trustee of
Former Secretary of the various Templeton mutual
United States Department of funds
the Treasury;
Former Chairman of the
Board, Dillon, Read & Co.
Inc. (investment banking
firm)
J. Barclay Collins II... Executive Vice President and 55 1986 Dime Bancorp, Inc.
General Counsel
Thomas H. Kean.......... President, Drew University; 64 1990 ARAMARK Corporation Bell
Former Governor of the Atlantic Corporation
State of New Jersey The CIT Group, Inc.
United HealthCare
Corporation
Frank A. Olson.......... Chairman of the Board, The 67 1998 Becton Dickinson and
Hertz Corporation Company
Fund American Enterprises
Holdings, Inc.
</TABLE>
2
<PAGE> 6
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE -- (CONTINUED)
Class II
Term expiring in 2002
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
---- ----------------------- --- -------- -------------------
<S> <C> <C> <C> <C>
Edith E. Holiday......... Attorney; 47 1993 Beverly Enterprises, Inc.
Former Assistant Hercules, Incorporated
to the President of the H.J. Heinz Company
United States and Secretary RTI International
of the Cabinet; Metals, Inc.
Former General Counsel, Director or trustee of
United States Department of various Franklin Templeton
the Treasury mutual funds
W. S. H. Laidlaw......... President and Chief Operating 44 1994 Premier Oil plc
Officer
Roger B. Oresman......... Consulting Partner, 79 1969 --
Milbank, Tweed,
Hadley & McCloy LLP
(attorneys)
Robert N. Wilson......... Vice Chairman of the Board of 59 1996 United States Trust
Directors, Johnson & Corporation
Johnson
Robert F. Wright......... Former President and Chief 74 1981 --
Operating Officer of the
company
</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. John B. Hess, formerly senior executive
vice president of the company, was elected chairman of the board and chief
executive officer, and Mr. Laidlaw, formerly an executive vice president of the
company and managing director of its wholly-owned British subsidiary, Amerada
Hess Limited, was elected president and chief operating officer of the company.
Mr. Johnson served in various senior executive positions at H.J. Heinz Company
prior to his becoming president and chief executive officer in 1998. Mr. Olson
retired as chief executive officer of The Hertz Corporation at the end of 1999
and continues as non-executive chairman of its board.
John B. Hess, Nicholas F. Brady, Thomas H. Kean and John Y. Schreyer may be
deemed to be control persons of the company by virtue of their beneficial
ownership of common stock in their capacity as executors of the estate of Leon
Hess and as trustees of certain related trusts. See "Ownership of Voting
Securities by Certain Beneficial Owners."
3
<PAGE> 7
The audit committee of the board of directors is composed of William I.
Spencer, Chairman, Edith E. Holiday, Thomas H. Kean and Robert N. Wilson. The
audit committee met five times in 1999. The audit committee reviews:
- the audit plan developed by the company's independent auditors in
connection with their annual audit of the company's financial statements,
- the results of audits performed by the company's independent auditors,
- the independent auditors' charges to the company,
- the response of management of the company to management letters issued by
the company's independent auditors,
- current accounting rules and changes therein,
- the operations of the company's internal audit department,
- the company's audited financial statements, and
- the implementation of the company's Business Practice Guide covering
compliance with applicable laws and company policy.
The audit committee also recommends the selection of independent auditors to the
board of directors each year.
The board of directors' compensation committee is composed of Nicholas F.
Brady, Chairman, Peter S. Hadley, William I. Spencer and Robert N. Wilson. The
compensation committee met four times in 1999, once with respect to 1998
business. The compensation committee approves and administers the company's
compensation policies for executive officers and approves the compensation of
the chief executive officer, and is authorized to make awards of options,
restricted stock and other stock and cash compensation permitted under the
amended and restated 1995 long-term incentive plan.
The employee benefits and pension committee 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 1999, oversees the company'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 and the savings and
stock bonus plan for retail operations employees.
The directors and board affairs committee is composed of Nicholas F. Brady,
Chairman, John B. Hess, Edith E. Holiday and Thomas H. Kean. This committee is
responsible for reviewing:
- the size and composition of the board,
- appropriate board practices and procedures,
- board meeting content,
- frequency and length of board meetings, and
- composition and function of committees of the board of directors.
4
<PAGE> 8
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 company, including a brief summary of each
candidate's qualifications. This committee did not meet in 1999.
The board of directors met ten times in 1999, and 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 1999.
CERTAIN TRANSACTIONS
The company retained Milbank, Tweed, Hadley & McCloy LLP, of which Mr.
Oresman is a consulting partner, to provide legal services in 1999. It is
expected that the company's dealings with this firm will continue in 2000.
In 1999, the company sold petroleum products to The Hertz Corporation, of
which Mr. Olson was chairman of the board and chief executive officer during
1999, in the aggregate amount of $1,039,221 at competitive market prices. The
company expects to continue to make such sales in 1999.
5
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF COMPENSATION
The following table sets forth information on compensation paid or accrued
for each of the three fiscal years ended December 31, 1999 to the chief
executive officer and the four other most highly compensated executive officers,
for services in all capacities to the company and its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------- -------------------------------------
AWARDS PAYOUTS
------------------------ ----------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL ANNUAL AWARD(S)($) 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,......... 1999 1,000,000 1,150,000 -- -- 150,000 -- 8,000
Chairman of the 1998 1,000,000 300,000 -- -- 100,000 -- 8,000
Board and Chief 1997 1,000,000 500,000 -- 2,737,500 150,000 -- 8,000
Executive Officer
W. S. H. Laidlaw,..... 1999 900,000 925,000 140,150** -- 100,000 -- 8,000
President and Chief 1998 900,000 250,000 -- -- 65,000 -- 8,000
Operating Officer 1997 900,000 400,000 -- 2,190,000 120,000 -- 8,000
J. Barclay Collins,... 1999 650,000 350,000 -- -- 60,000 -- 8,000
Executive Vice 1998 650,000 100,000 -- -- 40,000 -- 8,000
President and 1997 650,000 150,000 -- 1,368,750 75,000 -- 8,000
General Counsel
John Y. Schreyer,..... 1999 650,000 350,000 -- -- 60,000 -- 8,000
Executive Vice 1998 650,000 100,000 -- -- 40,000 -- 8,000
President and 1997 650,000 150,000 -- 1,368,750 75,000 -- 8,000
Chief Financial
Officer
F. Borden Walker,..... 1999 475,000 100,000 -- -- 15,000 -- 8,000
Senior Vice 1998 475,000 20,000 -- -- 10,000 -- 6,400
President 1997 450,000 25,000 -- 547,500 30,000 -- --
</TABLE>
- ---------------
* The cash bonuses shown above for each year were paid early in the following
year.
** Includes moving expenses and related costs of $81,275 paid by the company
in connection with Mr. Laidlaw's relocation to London and payment for tax
preparation services in the amount of $51,500.
6
<PAGE> 10
*** At December 31, 1999, the named executives each held shares of restricted
common stock, subject to vesting pursuant to the company's restricted stock
plan, in the following amounts and having the following aggregate market
values at such date:
<TABLE>
<S> <C> <C>
Mr. Hess 50,000 shares $2,837,500
Mr. Laidlaw 40,000 shares $2,270,000
Mr. Collins 25,000 shares $1,418,750
Mr. Schreyer 25,000 shares $1,418,750
Mr. Walker 10,000 shares $567,500
</TABLE>
To the extent paid on the company's common stock generally, dividends
accrue on shares of restricted stock and are held in escrow until vesting,
at which time they are paid with interest at short-term market rates to
the named executives. At December 31, 1999, the named executives held book
value appreciation units under the restricted stock plan in the following
amounts and having no market value at such date:
<TABLE>
<S> <C>
Mr. Hess 50,000 units
Mr. Laidlaw 40,000 units
Mr. Collins 25,000 units
Mr. Schreyer 25,000 units
Mr. Walker 10,000 units
</TABLE>
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 five-year vesting period of the restricted stock. No further
awards could be granted under this plan after 1997.
**** Amounts shown in column (i) represent matching contributions of the company
credited to the named executive officers under the company's employees'
savings and stock bonus plan.
STOCK OPTIONS
On December 1, 1999, the board of directors adopted amendments to the 1995
long-term incentive plan, including a 5,000,000 share increase in the number of
shares reserved for awards under this plan. On adoption of these amendments, the
compensation committee approved awards of non-qualified stock options subject to
requisite approval of the amended plan by stockholders at the annual meeting. If
this approval is not obtained, these awards will be void. No stock appreciation
rights were granted to executive officers for 1999. The following table sets
forth information concerning individual grants
7
<PAGE> 11
of stock options made under the incentive plan for 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,..................... 150,000 11.7 58.13 12/1/09 3,031,500
Chairman of the Board and
Chief Executive Officer
W. S. H. Laidlaw,................. 100,000 7.8 58.13 12/1/09 2,021,000
President and Chief Operating
Officer
J. Barclay Collins,............... 60,000 4.7 58.13 12/1/09 1,212,600
Executive Vice President
John Y. Schreyer,................. 60,000 4.7 58.13 12/1/09 1,212,600
Executive Vice President
F. Borden Walker,................. 15,000 1.2 58.13 12/1/09 303,150
Senior Vice President
</TABLE>
- ---------------
* This table includes information about stock options awarded by the
compensation committee effective December 1, 1999 as part of compensation in
respect of the last fiscal year. The award of these options is subject to
stockholder approval of the amended and restated 1995 long-term incentive
plan. These options become fully exercisable December 1, 2000, except that
options may become exercisable earlier in full in cases of death, disability,
normal retirement or change of control. 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. The options remain
exercisable until December 1, 2009, except in cases of termination of
employment for reasons other than death, disability or normal retirement, in
which case options remain exercisable only for specified periods. If a
grantee's employment terminates before these options become exercisable, they
will be forfeited. The table excludes awards made in February 1999 as 1998
compensation. These awards were reported in last year's proxy statement.
** The grant date present values shown in the above table have been determined
using the Black-Scholes option pricing model. This model, like all pricing
models, requires 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
20.4% (based on historical volatility of the common stock over the seven-year
period ending December 1, 1999); risk-free rate of return of 6.32%; and
dividend yield of 1.0%.
8
<PAGE> 12
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,................ -- -- 404,000/250,000 847,250/756,000
Chairman of the Board and
Chief Executive Officer
W. S. H. Laidlaw,............ 25,000 375,250 255,000/165,000 420,000/491,400
President and Chief
Operating Officer
J. Barclay Collins,.......... -- -- 148,000/100,000 340,625/302,400
Executive Vice President
John Y. Schreyer,............ -- -- 148,000/100,000 340,625/302,400
Executive Vice President
F. Borden Walker,............ -- -- 56,500/25,000 136,400/75,600
Senior Vice President
</TABLE>
- ---------------
* Includes options granted December 1, 1999 subject to shareholder approval of
the amended and restated 1995 long-term incentive plan.
RETIREMENT PLANS
The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age under the company's employees'
pension plan, a qualified defined benefit pension plan and a nonqualified
supplemental plan that provides benefits, paid from a trust established and
funded by the company, that would otherwise be paid to participants under the
pension plan but for limitations imposed by the Internal Revenue Code:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 600,000 $144,000 $192,000 $240,000 $288,000 $336,000
1,000,000 240,000 320,000 400,000 480,000 560,000
1,400,000 336,000 448,000 560,000 672,000 784,000
1,800,000 432,000 576,000 720,000 864,000 1,088,000
2,200,000 528,000 704,000 880,000 1,056,000 1,232,000
</TABLE>
9
<PAGE> 13
A participant's remuneration covered by the pension plan and the
supplemental plan is the greater of:
- twelve times the participant's average monthly compensation (as reported
on an annual basis in columns (c) and (d) 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 120 months
immediately preceding the participant's retirement date, and
- the participant's average annual compensation in any three calendar years
during the ten calendar years 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, 1999 was: Mr. Hess: $1,650,000; Mr. Laidlaw: $1,425,000; Mr.
Collins: $850,000; Mr. Schreyer: $850,000, and Mr. Walker, $515,000.
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, 2000
are as follows: Mr. Hess, 22 years; Mr. Laidlaw, 18 years; Mr. Collins, 15
years; Mr. Schreyer, 9 years; and Mr. Walker, 3 years. As of February 1, 2000,
Mr. Schreyer had 35 years of credited service under the supplemental plan under
a determination of the compensation committee that gave Mr. Schreyer credit for
26 years of prior service with his previous employer for purposes of determining
benefits 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
During 1999, the company entered into change in control termination benefit
agreements with executive officers and certain other officers of the company.
These agreements provide for lump sum cash payments equal to a multiple of an
executive's annual compensation if the executive is actually or constructively
terminated within 24 months following a change in control, as defined in the
agreements. For these purposes, annual compensation consists of the executive's
base pay at the date of his termination or immediately before the change in
control, whichever is higher, plus the greater of his or her target bonus for
the year in which the change in control occurs or the highest bonus earned in
the three fiscal years preceding the change in control. The multiple of annual
compensation received is three times for the named executive officers (other
than Mr. Walker) and two times for Mr. Walker and all other officers with whom
such agreements were entered into.
In addition, the executive is entitled to receive a pro rata portion of his
or her target bonus for the fiscal year in which termination occurs. The
executive is also entitled to receive continuation of major medical, dental and
other welfare benefits for 24 months following termination (36 months in the
case of the named executive officers other than Mr. Walker). The agreements
provide for immediate vesting of retirement benefits upon termination and
certain other ancillary benefits.
For purposes of these agreements, constructive termination includes a
reduction in base salary or target annual bonus or a material adverse change in
the nature or scope of the executive's authorities or responsibilities. The
company estimates that the maximum amount payable under these agreements based
on current compensation levels would not exceed $62 million in the aggregate or
about 1% of the company's market value at December 31, 1999.
10
<PAGE> 14
Mr. Schreyer has an agreement with the company which provides credit for
prior service and determines benefits payable under the company'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, at the compensation
committee's discretion, 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 company or any of its
subsidiaries receives an annual fee of $55,000 for membership on the board of
directors and a fee of $1,000 for each board of directors' and stockholders'
meeting attended. These directors receive 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. However, each
such director who is a member of the executive committee receives an additional
annual fee of $75,000, but no fee for meetings attended. The members of the
executive committee are Nicholas F. Brady, John B. Hess, Thomas H. Kean, W. S.
H. Laidlaw, John Y. Schreyer, William I. Spencer and Robert F. Wright. Messrs.
Hess, Laidlaw and Schreyer are employees of the company and receive no
additional compensation for serving on any committee of the board of directors.
In addition, each non-employee director receives 200 shares of common stock
in the beginning of each year. These awards are made from treasury shares
purchased by the company in the open market.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the board of directors is responsible for
approving and administering the company's compensation policies for executive
officers and approving the compensation of the chief executive officer of the
company.
Executive Compensation Policies. The company's executive compensation
policies are designed to attract and retain executives and motivate them to
achieve the company's business goals through a combination of cash and
stock-based compensation. The key elements of executive compensation consist of
cash salary, cash bonuses, stock option awards, and 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 company's matching
contributions under the employees' savings and stock bonus plan and group life
insurance and health benefits. In 1999, independent consultants continued to
work with the company to broaden strategies to relate a greater portion of
compensation to corporate and business unit performance.
Cash Compensation. In 1999, the compensation committee continued the
restructuring of cash compensation paid to executive officers through the
implementation of the annual cash bonus plan for corporate executives, including
executive officers, initiated in 1998. The goal of this plan is to relate a
greater portion of cash compensation to corporate performance. Before
implementation of the new plan, the company relied on base salary as the
predominant element of cash compensation and paid occasional discretionary cash
bonuses.
11
<PAGE> 15
Salary. In the past, salaries were targeted to deliver cash compensation
at the 75th percentile of that of a group of surveyed industrial companies, in
recognition of the company's need to remain competitive in attracting and
retaining talented executives to work as part of a small management team
functioning in a demanding corporate and market environment. While it remains
the company's goal to target total cash compensation at this level, the intent
of the bonus program is to target base salary as a component of cash
compensation and to rely on annual cash bonuses to provide the remaining cash
compensation if performance incentives under the bonus program are met. However,
base salary remains an important 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,
- recent corporate performance, including results of operations, success in
implementing corporate strategy and long-term goals and development of
future strategies, and
- an objective of targeting cash compensation at the 75th percentile of
such amount as shown in surveys of a group of companies compiled by an
independent consultant.
For 1999, the compensation committee relied on two surveys: first, a survey of
over 160 industrial companies with revenues comparable to the company, including
four companies also included in Standard & Poor's Oil (Domestic
Integrated) -- 500 Stock Index discussed under "Performance Graph", and a survey
comprising major integrated oil and gas companies including six companies also
included in the stock index. Consistent with the intent to place greater
reliance on the annual cash bonus plan, no salary increases were granted to the
company's 11 executive officers in 1999.
Cash Bonus. The annual cash bonus plan approved by the compensation
committee for 1999 for executive officers, including the named executive
officers, has both quantitative and discretionary elements. A target bonus was
established for each executive officer at a level such that, when combined with
the individual's salary, his or her total cash compensation approximates the
75th percentile of total cash compensation for such individual's position in the
surveys referred to above. Fifty percent of the target bonus is based on
attainment of a specified target level of a quantitative corporate performance
measure, net income before interest and special items, and the other fifty
percent of the bonus is discretionary. For business unit executive officers,
including one of the named executive officers, one-third of the executive
officer's cash bonus is based on attainment of the corporate performance
measure, one-third is based on attainment of a specified performance measure for
the executive officer's business unit, and one-third is discretionary.
The weightings were developed to provide for a quantifiable performance
incentive, but also to permit discretion to adjust compensation to meet survey
percentile benchmarks and to take account of unusual competitive market demands
for specific skills, unforeseen conditions like a material change in the price
assumptions underlying the quantitative component, and individual performance
relative to peers. Pay-outs may range from zero to 150% of each component of the
target bonus, based on the percentage attainment of the corporate and business
unit performance measures and, with respect to the discretionary component, the
compensation committee's determination of an appropriate amount.
In 1999, the company achieved 152% of the corporate performance goal and
157% of the business unit performance goals for the exploration and production
business unit, 89% for the
12
<PAGE> 16
retail business unit and 121% for the refining and marketing business unit.
Corresponding percentages of an executive officer's target bonus attributable to
corporate and business unit performance were paid out, subject to the 150% limit
noted above.
With respect to the discretionary component of target bonuses, the
compensation committee approved payouts on average of approximately 109% of the
discretionary target to executive officers other than the named executive
officers and approximately 82% of the discretionary target to the named
executive officers. The committee decided to pay out less than the maximum
discretionary component, and in the case of the named executive officers, less
than the discretionary target, for two reasons. First, this payout level was
appropriate to keep total cash compensation in line with 75th percentile
benchmarks. Second, while the company's financial and operating results were
much improved from last year, the committee believes that further improvement
could have been achieved.
Total cash compensation for 1999 including salary and bonuses increased 36%
on average for all executive officers and 47% on average for the named executive
officers. Cash compensation in excess of $1 million to the named executive
officers is not deductible for federal income tax purposes.
Long-Term Compensation -- 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 1996 annual meeting. It
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 common stock, of which 152,000 remained available for future
awards at December 1, 1999.
Awards under the incentive plan to executive officers have been primarily
option-based, as the compensation 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 for a
significant portion of long-term compensation reflects a trend toward greater
use of stock options by large industrial companies, including major oil
companies.
On December 1, 1999 the board of directors adopted amendments to the plan
to increase the number of shares authorized for awards by 5,000,000 shares and
to make certain other
13
<PAGE> 17
changes described below. The amendments were incorporated in an amended and
restated 1995 long-term incentive plan and approved by the board of directors.
The additional shares are necessary to continue making awards under the
amended incentive plan. The compensation committee believes that long-term
stock-based incentive compensation is vital to promote communality among
management and stockholders and to keep the company's compensation packages
competitive with its peers. Without this compensation, the company would need to
place greater reliance on cash compensation to attract and retain executives, a
result which the compensation committee believes could ultimately work to
misalign management and stockholders' interests. The additional 5,000,000 shares
reserved for awards under the amended incentive plan constitute approximately
5.5% of the outstanding shares of common stock. This number was selected after
review of institutional guidelines and industry norms. The annual share
utilization of the plan is expected to range from 1/2% to 1 1/2% of the shares
outstanding, an amount which the compensation committee believes is consistent
with those guidelines and industry practices. In addition, the board of
directors has authorized a $300 million stock repurchase program which should
largely offset any dilutive effect from the issuance of these additional shares.
The compensation committee believes that the other amendments reflected in
the amended incentive plan do not adversely affect stockholders' interests.
Certain of the changes -- such as the elimination of the compensation
committee's ability to issue up to 1,000,000 performance based awards per year,
elimination of the compensation committee's authority to make other types of
stock-based awards, like bonus stock, and certain substitute and retroactive
awards that could have the effect of repricing, and an express requirement that
approval of stockholders be obtained for certain material amendments to the
amended incentive plan -- restrict the compensation committee's authority and
protect stockholders' interests. The amendment to permit the transferability of
options and stock appreciation rights to family members was made to facilitate
estate planning strategies for participants, following changes in applicable
securities rules to permit transferability. The elimination of the 1,000,000
share annual limit on stock option and stock appreciation rights awards was made
after it was determined that it was not typical in similar plans and was
unnecessary under institutional investor guidelines.
Long-Term Compensation -- 1999 Awards. Upon adoption of the amended
incentive plan by the board of directors in December 1999, the compensation
committee granted awards of nonqualified stock options covering 1,287,500 shares
to participants under the plan, subject to requisite approval of the amended
incentive plan within one year by the company's stockholders. If this approval
is not obtained, these awards will be void. The awards were granted with an
exercise price at the market price on the grant date and the amounts awarded to
each executive officer were made with the objective to target long-term
compensation at the 75th percentile of such compensation in the surveys referred
to above, based on grant date present values. The 1999 long-term compensation
program for executive officers consisted exclusively of stock options. The
performance-based nature of the options will permit any compensation paid in
respect of the options to a named executive in a fiscal year in excess of $1
million to be deductible by the company for federal income tax purposes.
Of the stock options awarded in December 1999, an aggregate of 457,500
stock options were awarded to executive officers. The compensation committee
also approved awards of 24,000 shares of restricted stock for 1999, none of
which were to executive officers.
14
<PAGE> 18
Change in Control Agreements. During 1999, the company entered into change
in control termination benefit agreements with executive officers and certain
other officers of the company. These agreements, described in more detail above,
provide for lump sum cash payments and continuation of welfare benefits if such
officers are actually or constructively terminated following a change of control
of the company, as defined in the agreements. In approving these agreements, the
compensation committee recognized that the company would need to retain these
officers to assess and implement any possible business combination and that it
was in the company's best interests to provide appropriate financial
arrangements to reduce the likelihood of an executive's leaving the company or
being distracted by personal uncertainties because of a possible business
combination.
Compensation of the Chief Executive Officer. Mr. Hess' cash compensation
for 1999 was established in the manner discussed above for all executive
officers. Mr. Hess' combined salary and bonus for 1999 approximated 75th
percentile cash compensation for chief executive officers in the industrial
company survey referred to above but were well below similar 75th percentile
cash compensation for executive officers in the oil industry group survey.
In approving the award of stock options shown in the summary compensation
table to Mr. Hess for 1999, the compensation committee again followed the
principles set forth above in establishing long-term compensation for all
executive officers for 1999. Based on comparative analyses of long-term
compensation as published in the surveys, the total present value of Mr. Hess'
long-term compensation based on expected option values derived from the
consultant's pricing model was well below the 75th percentile for chief
executive officers in the surveys.
The compensation committee concluded that the total of Mr. Hess' 1999 cash
compensation and the grant date present value of his long-term compensation was
reasonable compared with that of his peers and appropriate in view of the
success of the critical corporate initiatives he has overseen particularly
during periods of extremely adverse market conditions.
Nicholas F. Brady
Peter S. Hadley
William I. Spencer
Robert N. Wilson
15
<PAGE> 19
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return, assuming reinvestment of dividends, on the company's common stock with
the cumulative total return, assuming reinvestment of dividends, of
- Standard & Poor's 500 Stock Index, which includes the company,
- Standard & Poor's Oil (Domestic Integrated) - 500 Stock Index, a
published industry index which includes the company,
as of each December 31 over a five-year period commencing on December 31, 1994
and ending on December 31, 1999:
TOTAL SHAREHOLDER RETURNS
(DIVIDENDS REINVESTED)
YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
S&P OIL (DOMESIC
AMERADA HESS INTEGRATED) - 500 STOCK
CORPORATION S&P 500 STOCK INDEX INDEX
------------ ------------------- -----------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 117.57 137.58 113.85
1996 129.79 169.17 143.98
1997 124.39 225.60 171.31
1998 114.01 290.08 139.08
1999 131.43 351.12 172.69
</TABLE>
16
<PAGE> 20
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 company's
voting securities by beneficial owners known by the company 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.......... John B. Hess 13,636,440(b)(c)(d) 14.95
John Y. Schreyer 11,119,699(b)(c)(e) 12.24
Burton T. Lefkowitz 10,851,251(b)(c) 11.97
Nicholas F. Brady 9,097,624(b)(f) 10.03
Thomas H. Kean 9,090,024(b)(g) 10.02
c/o Amerada Hess Corporation
1185 Avenue of the Americas
New York, New York 10036
Common Stock.......... FMR Corp. 7,734,894(h) 8.53
Edward C. Johnson 3d
Abigail P. Johnson
c/o FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109
Common Stock.......... T. Rowe Price Associates, Inc. 6,855,267(i) 7.50
100 E. Pratt Street
Baltimore, Maryland 21202
Common Stock.......... Dodge & Cox 4,726,302(j) 5.20
One Sansome St., 35th Fl.
San Francisco, California 94104
</TABLE>
- ---------------
(a) The information in the above table and in the notes thereto was
obtained, with respect to FMR Corp. et al., Dodge & Cox, and T. Rowe Price
Associates, Inc. from Schedules 13G filed by such reporting persons with the
Securities and Exchange Commission in February and March 2000. Information with
respect to Messrs. Hess, Schreyer, Lefkowitz, Brady and Kean is as of February
1, 2000, with respect to FMR Corp. et al. is as of February 29, 2000 and with
respect to the others is as of December 31, 1999.
(b) This amount includes 3,197,206 shares held by the estate of Leon Hess
and 140,218 shares held by four corporations of which the estate of Leon Hess
owns the voting preferred stock having at least 80% of the total voting power of
all classes of stock. John B. Hess, as an executor of the estate, has sole
voting power over this stock and shares dispositive power with Messrs. Schreyer,
Lefkowitz, Brady and Kean, who are the other executors. This amount also
includes 5,750,000 shares held by a charitable lead annuity trust established
under the will of Leon Hess. Mr. Hess has sole voting power over the stock held
by this trust and shares dispositive power over such stock with Messrs.
Schreyer, Lefkowitz, Brady and Kean, who are the other trustees of this trust.
(c) This amount includes 1,763,827 shares held by the Hess Foundation, Inc.
of which Messrs. Hess, Lefkowitz and Schreyer are directors and as to which they
share voting and dispositive power.
17
<PAGE> 21
(d) This amount includes:
- 578,410 shares owned directly by Mr. Hess, as to which he has sole voting
and dispositive power,
- 360,596 shares held by three trusts for the benefit of Mr. Hess and his
children, as to which Mr. Hess is trustee and has sole voting and
dispositive power,
- 50,000 shares held in escrow under the company's restricted stock plan
over which Mr. Hess has voting but not dispositive power,
- 504,000 shares underlying options to purchase common stock, as to which
he has no voting or dispositive power until they are acquired upon
exercise of the options,
- 12,089 shares vested in the name of Mr. Hess under the employees' savings
and stock bonus plan as to which he has sole dispositive power and sole
voting power over 6,194 shares, and
- 1,280,094 shares held by a family corporation, the preferred stock of
which is held by a trust and 33 1/3% of the common stock of which is
owned by Mr. Hess. The preferred stock of this corporation has 99% of the
total voting power of all classes of stock of this corporation. Mr. Hess,
as trustee of this trust, has sole voting and dispositive power over this
stock.
(e) This amount includes:
- 23,000 shares owned directly by Mr. Schreyer, as to which he has sole
voting and dispositive power,
- 25,000 shares held in escrow for Mr. Schreyer under the company's
restricted stock plan over which Mr. Schreyer has voting but not
dispositive power,
- 188,000 shares underlying options to purchase common stock, as to which
he has no voting or dispositive power until they are acquired upon
exercise of the options,
- 3,226 shares vested in the name of John Y. Schreyer under the employees'
savings and stock bonus plan, as to which he has sole dispositive power
and sole voting power over 1,614 shares, and
- 29,222 shares held by four trusts as to which Mr. Schreyer has shared
voting and dispositive power.
(f) This amount includes 10,200 shares held directly by Mr. Brady, as to
which he has sole voting and dispositive power.
(g) This amount includes 2,600 shares held directly by Mr. Kean, as to
which he has sole voting and dispositive power.
(h) These shares represent the total number of shares reported as
beneficially owned in a joint filing on Schedule 13G by the above listed
reporting persons. These shares include 233,184 shares as to which one or more
of such beneficial owners have sole voting power and 7,734,894 shares as to
which one or more of them have sole dispositive power. FMR Corp. controls
Fidelity Management & Research Company, a wholly-owned subsidiary of FMR Corp.
and a registered investment adviser, which is the beneficial owner of 7,124,010
shares of common stock 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
564,034 shares of common stock.
18
<PAGE> 22
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 P. 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 owners includes 22,050 shares owned directly by Mr.
Johnson or in Johnson family trusts.
Fidelity International Limited, a Bermudan joint stock company ("FIL") and
investment adviser to various investment companies and certain international
investors, is a beneficial owner of 24,800 shares of common stock. A partnership
controlled by Edward C. Johnson and members of his family owns 39.89% of the
voting power of this company. FMR Corp. is making this filing on a voluntary
basis as if all of the shares of this company are beneficially owned by FMR
Corp. and this company.
(i) These securities are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. serves as investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of 1934,
T. Rowe Price Associates, Inc. is deemed to be a beneficial owner of such
securities; however, T. Rowe Price Associates, Inc. expressly disclaims that it
is, in fact, the beneficial owner of such securities. T. Rowe Price Associates,
Inc. has sole voting power with respect to 1,615,363 shares and sole dispositive
power with respect to 6,855,267 shares.
(j) This amount includes 4,324,252 shares as to which such beneficial owner
has sole voting power, 42,200 shares as to which such beneficial owner has
shared voting power, and 4,726,302 shares as to which such beneficial owner has
sole dispositive power.
19
<PAGE> 23
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 company on February 1, 2000. The persons
listed below 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>
PERCENT OF
OUTSTANDING OF TOTAL NUMBER OF
SHARES OF SHARES BENEFICIALLY
TOTAL NUMBER OF SHARES COMMON STOCK OWNED, NUMBER OF
NAME BENEFICIALLY OWNED(a) OWNED OPTION SHARES
---- ---------------------- ------------ -------------------
<S> <C> <C> <C>
Nicholas F. Brady............... 9,097,624(b) 10.03 --
J. Barclay Collins II........... 217,077 -- 188,000
Peter S. Hadley................. 1,686(c) -- --
John B. Hess.................... 13,636,440(d) 14.95 504,000
Edith E. Holiday................ 1,600 -- --
William R. Johnson.............. 1,600 -- --
Thomas H. Kean.................. 9,090,024(e) 10.02 --
W. S. H. Laidlaw................ 451,489 -- 320,000
Frank A. Olson.................. 1,400 -- --
Roger B. Oresman................ 11,035 -- --
John Y. Schreyer................ 11,119,699(f) 12.24 188,000
William I. Spencer.............. 2,100 -- --
F. Borden Walker................ 91,789 -- 71,500
Robert N. Wilson................ 2,300 -- --
Robert F. Wright................ 120,689 -- --
All directors and executive
officers as a group........... 15,192,692(g) 16.48 1,536,000
</TABLE>
- ---------------
(a) These figures include 576 shares vested in the name of Mr. Collins,
12,089 shares vested in the name of Mr. Hess, 5,789 shares vested in the
name of Mr. Laidlaw, 3,226 shares vested in the name of Mr. Schreyer,
289 shares vested in the name of Mr. Walker, and 24,306 shares vested
for all executive officers and directors as a group under the employees'
savings and stock bonus plan. These individuals and the group have
investment power but generally do not have voting power over these
shares. However, shares purchased with each such individual's own
contributions will be voted by the plan trustee in accordance with such
individual's written instructions. These amounts also include 25,000
shares held in escrow under the restricted stock plan for Mr. Collins,
50,000 shares held in escrow under this plan for Mr. Hess, 40,000 shares
held in escrow under this plan for Mr. Laidlaw, 25,000 shares held in
escrow under this plan for Mr. Schreyer, 10,000 shares held in escrow
under this plan in the name of Mr. Walker and 180,000 shares held in
escrow under this plan and 15,000 shares held in escrow under the
incentive plan for all executive officers and directors as a group. As
to these shares, these individuals and the group have voting power but
not investment power. 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 they are exercised.
(b) See footnotes (b) and (f) to the table under the caption "Ownership of
Voting Securities by Certain Beneficial Owners."
20
<PAGE> 24
(c) Mr. Hadley holds these shares jointly with his wife and shares voting
and investment power.
(d) See footnotes (b), (c) and (d) to the table under the caption
"Ownership of Voting Securities by Certain Beneficial Owners."
(e) See footnotes (b) and (g) to the table under the caption "Ownership of
Voting Securities by Certain Beneficial Owners."
(f) See footnotes (b), (c) and (e) to the table under the caption
"Ownership of Voting Securities by Certain Beneficial Owners."
(g) Reflects shared beneficial ownership of shares by Messrs. Brady, Hess,
Kean and Schreyer as explained in footnotes (b) and (c) to the table
under the caption "Ownership of Voting Securities by Certain Beneficial
Owners."
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 LLP as the independent auditors of the
company for the fiscal year ending December 31, 2000. Ernst & Young LLP has
acted for the company in this capacity since November 1, 1971. The board
proposes that the stockholders ratify this selection at the annual meeting.
If the stockholders do not ratify the selection of Ernst & Young LLP, the
selection of independent auditors will be reconsidered by the board of
directors.
Representatives of Ernst & Young LLP 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.
21
<PAGE> 25
PROPOSAL TO APPROVE THE ADOPTION OF THE AMENDED
AND RESTATED 1995 LONG-TERM INCENTIVE PLAN
In December 1995, the board of directors of the company adopted the 1995
long-term incentive plan and stockholders of the company approved the incentive
plan in May 1996. The incentive plan authorized the compensation committee at
its discretion to make awards of up to 4,500,000 shares of common stock as
restricted stock, non-qualified or incentive stock options, stock appreciation
rights, deferred stock or other stock based awards. As of December 1, 1999,
4,348,000 shares had been awarded. On December 1, 1999 the board of directors
adopted amendments to the plan to increase the number of shares authorized for
awards by 5,000,000 shares and to make certain other changes described below.
The amendments were incorporated in an amended and restated 1995 long-term
incentive plan and approved by the board of directors. Simultaneous with the
adoption of the amended incentive plan, the compensation committee granted
awards of non-qualified stock options covering 1,287,500 shares to participants
under the amended incentive plan, subject to approval of the amended incentive
plan within one year by stockholders. If this approval is not obtained, these
awards will be void and of no force and effect.
The board of directors recommends a vote for the proposal to approve the
adoption of the amended incentive plan. Approval of the adoption of the amended
incentive plan requires the affirmative vote of a majority of the shares of the
votes cast at the annual meeting. Abstentions will not be counted as a vote cast
and therefore will have no effect on the vote on the amended incentive plan.
Broker non-votes, if any, will not be counted as present and entitled to vote on
the proposal.
DESCRIPTION OF THE AMENDMENTS TO THE INCENTIVE PLAN
Set forth below is a description of the amendments adopted by the board of
directors and reflected in the amended incentive plan. References to the
incentive plan are to the 1995 long-term incentive plan as in effect before its
amendment and restatement.
Increase in Number of Shares to be Awarded. The incentive plan reserved up
to 4,500,000 shares for issuance of awards. The amended incentive plan increases
the number of shares reserved by five million, thereby authorizing a total of
9,500,000 shares as available for awards since inception of the incentive plan.
Before the adoption of the amended incentive plan, 4,348,000 shares had been
awarded under the incentive plan and an additional 1,287,500 shares were
conditionally awarded in December 1999 upon the adoption of the amended
incentive plan.
Limits on Performance Awards, Performance-Based Restricted Stock Awards,
and Restricted Stock Awards. Under the incentive plan, at most 1,000,000 shares
in any year were permitted to be payable in respect of performance-based awards,
including performance-based restricted stock awards. In addition, a maximum of
1,000,000 shares was established for awards of restricted stock over the life of
the incentive plan. Under the amended incentive plan, the annual aggregate limit
on performance awards and performance-based restricted stock awards has been
eliminated and a new limit of 2,000,000 shares has been imposed for performance
awards, performance-based restricted stock awards and restricted stock awards,
in the aggregate, over the life of the amended incentive plan. Of these shares,
702,000 shares have already been awarded as restricted stock awards, leaving a
total of 1,298,000 shares available for future awards of these types.
Annual Limits on Stock Options and Stock Appreciation Rights. Under the
incentive plan, awards of stock options and stock appreciation rights in the
aggregate in any year could not
22
<PAGE> 26
exceed 1,000,000 shares. Under the amended incentive plan, this annual limit has
been eliminated.
Elimination of Certain Other Awards. Under the incentive plan, the
compensation committee was authorized to grant other awards, nominated or
payable in, valued in whole or in part by reference to, or otherwise based on or
related to, shares of common stock. Under the amended incentive plan, the
committee is no longer authorized to grant such other stock-based awards. Under
the incentive plan, the committee was also authorized to issue up to 225,000
shares as awards in substitution for, or retroactively in tandem with, prior
awards at exercise prices lower than that of the prior award. Although repricing
of stock options and stock appreciation rights is generally prohibited by the
incentive plan, these types of awards would have in effect allowed the
compensation committee, to a limited extent, to reprice previously granted stock
options. Under the amended incentive plan, the committee's ability to issue such
awards has been eliminated.
Transferability of Options. Under the incentive plan, generally a
recipient of an award is not permitted to assign, transfer, pledge or encumber
an award during his or her lifetime. Under the amended incentive plan, a limited
exception has been made so that options, stock appreciation rights, and other
awards constituting derivative securities may be transferred by an awardee to
immediate family members and certain entities beneficially owned solely by
immediate family members.
Performance Goals. The incentive plan specified performance criteria to be
used in determining whether the goals set forth in a performance-based award are
met. These criteria are the attainment of pre-established levels of net income,
market price per share, return on equity, return on capital employed or cash
flow. The amended incentive plan adds three more criteria -- earnings per share,
book value per share and total shareholder return -- for purposes of
performance-based awards. Approval of the amended incentive plan will also
constitute approval of these new criteria as well as reapproval of the
previously specified criteria for purposes of section 162(m) of the Internal
Revenue Code.
Change of Control. Under the incentive plan, on a change in control as
defined in the incentive plan all awards were automatically vested and cashed
out. Under the amended incentive plan, the automatic cash-out has been
eliminated and these awards may be cashed out only at the committee's
discretion.
Amendment. The amended incentive plan also adds a provision that expressly
requires the company to obtain the consent of stockholders to amendments of the
plan if the amendment
- increases the number of shares reserved for awards under the plan,
- change the class of participants eligible to receive awards under the
plan, or
- materially increases the benefits to participants under the plan.
DESCRIPTION OF THE AMENDED INCENTIVE PLAN
The following is a description of the amended incentive plan in its
entirety.
Purpose. The purpose of the amended incentive plan is to promote the
identity of interests between stockholders and employees of the company by
encouraging and creating appropriate levels of ownership of common stock of the
company by officers and other salaried employees. The plan will provide
meaningful long-term incentive opportunities for officers and other employees
who are responsible for the success of the company and its subsidiaries and who
are in a position to make significant contributions toward its objectives.
23
<PAGE> 27
Administration. The amended incentive plan will be administered by the
compensation committee, or such other committee of the board as may succeed to
the functions and responsibilities of the compensation committee. The
compensation committee may delegate to officers or managers of the company or
its subsidiaries the authority to perform administrative functions. The
compensation committee has full and final authority to select and designate plan
participants, to determine the type, amount and conditions of awards to be
granted under the plan and to make all related determinations. Unless authority
is specifically reserved to the board under the terms of the plan, or applicable
law, the compensation committee will have sole discretion in exercising such
authority under the plan.
Eligibility. Awards may be granted only to individuals who are officers or
other salaried employees, including without limitation employees who are also
directors of the company or its subsidiaries, as that term is defined in the
plan. No award may be granted to any member of the compensation committee. The
plan does not further limit the number of eligible employees or further specify
the basis for their participation. However, it is anticipated that the
compensation committee will make awards principally to those employees who have
made, and are expected to continue to make, significant contributions to the
growth and profitability of the company and whose service the company wishes to
retain. The approximate number of employees who are eligible is expected not to
exceed 225.
Shares Subject to Awards. The shares subject to awards will be shares of
common stock and such other securities of the company as may be substituted for
the shares of common stock. The total number of shares reserved and available
for awards under the plan is 9,500,000. The compensation committee has the
authority to determine the number of and time at which the shares shall be
deemed to be subject to awards and therefore counted against the number of the
shares reserved and available under the plan. If any shares to which an award
relates are forfeited or the award is settled or terminates without a
distribution of shares, any shares counted against the number of shares
available under the plan with respect to such award will, to the extent of the
forfeiture, settlement or termination, again be available for awards. The plan
also provides that the aggregate number of shares authorized under the plan will
be subject to adjustment in the event the compensation committee determines that
any distribution, recapitalization, stock split, reorganization, merger,
spin-off, repurchase, or other similar corporate transaction or event, affects
the shares such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of participants under the plan.
Terms of Awards. Awards may be granted on the terms and conditions
described in the plan. In addition, the compensation committee may generally
impose on any award or the exercise thereof, at the date of grant or thereafter,
additional terms and conditions, not inconsistent with the provisions of the
plan, including the acceleration of vesting of any awards or forfeiture of
awards in the event of termination of employment by any awardee. Payment by the
company or a subsidiary upon the grant or exercise of an award may be made in
such forms as the compensation committee determines, including cash, shares of
common stock, other awards, or other property, and may be made in a single
payment or transfer, in installments, or on a deferred basis. Generally, only
services may be required as consideration for the grant of any award. If the
terms and conditions imposed by the compensation committee on any award are not
complied with or achieved, the award will, unless otherwise provided under the
plan or determined by the compensation committee in accordance with
24
<PAGE> 28
the plan, be forfeited by the participant. Set forth below are the specific
types of awards authorized to be made by the compensation committee under the
plan:
- Performance Awards. The compensation committee is authorized to grant
performance awards conditioned upon the achievement of specified
performance criteria. These awards are intended to be "qualified
performance-based compensation" within the meaning of section 162(m) of
the Internal Revenue Code and will be paid solely on account of the
attainment of preestablished, objective performance goals within the
meaning of section 162(m) of the Internal Revenue Code. Until otherwise
determined by the compensation committee, the performance goal will be
the attainment of preestablished levels of net income, market price per
share, return on equity, return on capital employed, cash flow, earnings
per share, book value per share or total shareholder return. A
performance award will be denominated in shares and may be payable in
cash, shares, other awards, or other property, and have such other terms
as are determined by the compensation committee.
- Dividend Equivalents. The compensation committee is authorized to grant
dividend equivalents, representing an amount equal to the dividend
regularly paid on a share of the common stock. The compensation committee
may provide that dividend equivalents will be paid or distributed when
accrued or be reinvested in additional shares or awards, or otherwise
reinvested.
- Restricted Stock. The compensation committee is authorized to grant
restricted stock, subject to such restrictions as the compensation
committee may impose, including restrictions on the right to vote or
receive dividends on restricted stock. Generally, restricted stock must
vest either (i) in full at the expiration of a period of not less than
three years from the date of grant or (ii) proportionally over a vesting
period of not less than three years from the date of grant. However,
restricted stock may vest earlier in cases of death, disability or
retirement, as the compensation committee determines, or on a change of
control as provided in the plan. The compensation committee is not
permitted otherwise to accelerate the vesting of restricted stock.
However, the plan permits the compensation committee to award a limited
number of shares, discussed below, of special restricted stock without
regard to these vesting requirements. Performance-based restricted stock
will be forfeited unless preestablished performance criteria specified by
the compensation committee are met during the applicable restriction
period. Except as otherwise determined by the compensation committee,
termination of employment during the applicable restriction period,
restricted stock that is at that time subject to restrictions will be
forfeited and returned to the company. Unless otherwise determined by the
compensation committee, cash dividends and other distributions made or
paid with respect to the shares underlying an award of restricted stock
or performance-based restricted stock will be held in escrow, and may
(but need not) be reinvested as determined by the compensation committee.
These dividends and other distributions will be paid to the participant,
together with accrued interest or other earnings, when the shares are
delivered to the participant.
- Deferred Stock. The compensation committee is authorized to grant to
participants deferred stock to be delivered upon expiration of the
deferral period specified by the compensation committee. Deferred stock
will be subject to such restrictions as the committee may impose.
Generally, deferred stock must vest in full at the end of a
25
<PAGE> 29
period of not less than three years from the date of grant, except that
such deferred stock may vest earlier in cases of death, disability or
retirement, as the compensation committee determines, or on a change of
control as provided in the plan. The compensation committee is not
permitted otherwise to accelerate the vesting of deferred stock. However,
the plan permits the compensation committee to award a limited number of
shares, discussed below, of special deferred stock without regard to
these vesting requirements. Except as otherwise determined by the
compensation committee, upon termination of employment during the
applicable deferral period, all deferred stock at that time subject to
deferral will be forfeited.
- Non-qualified and Incentive Stock Options. The compensation committee is
authorized to grant either non-qualified stock options or incentive stock
options. The compensation committee will determine the exercise price per
share purchasable under an option. Except as may be otherwise required in
connection with anti-dilution adjustments, this price may not be less
than the fair market value of a share on the date of grant. The
compensation committee is not otherwise permitted to reduce the exercise
price of an outstanding option. The compensation committee will determine
the time or times at which an option may be exercised in whole or in
part, the methods by which such exercise price may be paid, the form of
such payment, and the methods by which shares will be delivered to
participants. Options will expire not later than ten years after the date
of grant. Incentive stock options will comply in all respects with
section 422 of the Code.
- Stock Appreciation Rights. The compensation committee may grant stock
appreciation rights that confer on the awardee the right to receive on
exercise for each share the excess of the fair market value of one share
on the date of exercise over the base price of the stock appreciation
rights as determined by the compensation committee as of the date of
grant. Except as otherwise required in connection with anti-dilution
adjustments, the base price will not be less than the fair market value
of a share on the date of grant. The compensation committee is not
otherwise permitted to reduce the base price of an outstanding stock
appreciation right.
Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the plan may be granted either alone or in addition to or in tandem with
any other award granted under the plan or any other plan of the company, any
subsidiary, or any business entity to be acquired by the company. Generally,
awards may not be granted in substitution for another award under the plan, or
retroactively in tandem with another award under the plan at an exercise or base
price lower than that of the previously granted award.
Limitation on the Number of Awards. In addition to the aggregate limit on
the number of shares that may be made subject to awards under the plan, awards
are also subject to the following limitations:
- Performance-Based Awards. The maximum number of shares underlying
performance-based awards in any year may not exceed 100,000 shares in the
case of any individual participant.
26
<PAGE> 30
- Stock Options and Stock Appreciation Rights. Each individual participant
may not receive in any year awards of options or stock appreciation
rights exceeding 250,000 underlying shares.
- Restricted Stock. A maximum of 2,000,000 shares in the aggregate may be
made subject to grants of restricted stock, performance-based awards and
performance-based restricted stock under the plan.
- Certain Special Awards. A maximum of 225,000 shares may be made subject
to awards of special restricted stock and special deferred stock, in the
aggregate.
Change of Control Provisions. The plan provides for acceleration of
vesting or exercisability of awards upon the occurrence of a change of control.
A change of control will generally be deemed to occur in the following
circumstances:
- the acquisition of 20% or more of the outstanding voting stock of the
company by any person or entity, other than acquisitions by Hess family
members or Hess-related entities;
- the persons serving as directors of the company as of December 6, 1995,
and those replacements or additions subsequently approved by a majority
vote of the board, ceasing to make up at least a majority of the board;
- approval by the stockholders of the company of a merger, consolidation or
reorganization in which the stockholders of the company before the merger
own 51% or less of the surviving corporation; or
- approval by the stockholders of the company of a complete liquidation or
dissolution of the company or sale of all or substantially all of the
assets of the company, other than to a corporation more than 51% of which
is owned after the sale by stockholders of the company prior to the sale.
On acceleration of vesting or exercisability following a change of control,
in the sole discretion of the compensation committee awards may be cashed out,
at a price per share equal to the highest price paid for a share on the
securities exchange in which the company's shares are then primarily traded, or
in a transaction in connection with such change of control, in the 60-day period
before the change of control.
Nontransferability. A participant's rights in any award may not be
pledged, encumbered or hypothecated to or in favor of any party (other than the
company), nor be subject to any liability of any participant to any party.
Unless otherwise determined by the compensation committee, no award subject to
any restriction will be assignable or transferable by a participant. However,
stock options and stock appreciation rights may be transferred by will or the
laws of descent and distribution or to an immediate family member or entities
beneficially owned solely by immediate family members.
Changes to the Plan and Awards. The board may amend, suspend or terminate
the plan without the consent of stockholders or participants. However, any
amendment, suspension, or termination will be subject to the approval of the
company's stockholders within one year after such board action if such
amendment:
- increases the number of shares reserved for awards under the plan,
- changes the class of participants eligible to receive awards under the
plan,
- materially increases the benefits to participants under the plan,
27
<PAGE> 31
- is required by any applicable law, regulation or stock exchange rule, or
- is advisable in the discretion of the board.
The compensation committee may, unless expressly prohibited by the plan, also
waive any conditions or rights under, or amend, suspend, or terminate, any award
theretofore granted and any related agreement. However, without the consent of
the affected participant, no such amendment, suspension, waiver, or termination
after the initial stockholder approval of the plan may materially impair the
rights of any participant under any award theretofore granted to such
participant.
Federal Income Tax Consequences. The following is a brief and general
summary of certain federal income tax consequences applicable to transactions
under the plan. Of course, the consequences of transactions depend on a variety
of factors, including an employee's tax status.
- Incentive Stock Options. An optionee will not realize income upon the
grant of an incentive stock option or, assuming requirements of the plan
and the Internal Revenue Code are met, upon exercise thereof. If the
shares are disposed of by the optionee more than two years after the date
of grant of the incentive stock option, and more than one year after the
shares are transferred to the optionee, any gain or loss realized upon
such disposition will be a long-term capital gain or loss. In this case,
the company will not be entitled to any income tax deduction in respect
of the option or its exercise. If the shares are disposed of by the
optionee within either such period in a taxable transaction, the excess
of the amount realized (up to the fair market value of such shares on the
exercise date) over the exercise price will be compensation taxable to
the optionee as ordinary income. In this case, the company will generally
be entitled to a deduction equal to the amount of ordinary income
realized by the optionee. If the amount realized upon the disqualifying
disposition exceeds the fair market value of the shares on the exercise
date, the excess will be a short-term capital gain. If the exercise price
exceeds the amount realized upon the disqualifying disposition, the
difference will be a short-term capital loss.
- Non-Qualified Stock Options. On the grant of a non-qualified stock
option, an optionee will not realize income. Generally, at the time a
non-qualified stock option is exercised, the optionee will realize
compensation taxable as ordinary income, and the company will generally
be entitled to a deduction, in an amount equal to the difference between
the fair market value on the exercise date of the shares of common stock
acquired pursuant to the exercise and the exercise price. On a subsequent
disposition of the shares, the optionee will realize either long-term or
short-term capital gain or loss, depending on the holding period of the
shares.
- Stock Appreciation Rights. On the grant of a stock appreciation right,
an optionee will not realize income. Generally, at the time a stock
appreciation right is exercised, an optionee will realize compensation
taxable as ordinary income, and the company will generally be entitled to
a deduction, in an amount equal to any cash received before applicable
withholding plus the fair market value on the exercise date of any shares
of common stock received.
- Restricted and Deferred Stock. An employee will not realize income upon
the award of restricted stock or deferred stock. Generally, unless an
employee has made an election under Section 83(b) of the Code, at the
time the terms and conditions
28
<PAGE> 32
applicable to restricted stock or deferred stock are satisfied, an
employee will realize compensation taxable as ordinary income. At that
time, the company will generally be entitled to a deduction, equal to the
then fair market value of the shares received by the employee, together
with accrued dividends and interest thereon, if any.
BENEFITS TO EXECUTIVE OFFICERS AND OTHER EMPLOYEES UNDER THE INCENTIVE PLAN
The total amount of benefits or amounts to be received by executive
officers and other employees under the amended incentive plan is not
determinable at this time because the compensation committee has awarded only a
portion of the new shares authorized for award under the amended incentive plan.
As previously stated, the compensation committee made awards, effective December
1, 1999, of non-qualified stock options, all subject to requisite stockholder
approval of the amended incentive plan at the annual meeting. The table below
discloses the number of shares of common stock underlying these awards and this
dollar value:
NEW PLAN BENEFITS (1999 AWARDS)
AMENDED AND RESTATED 1995 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE* NUMBER OF
NAME OR GROUP ($) OPTIONS
------------- ------------- ---------
<S> <C> <C>
John B. Hess, Chairman of the Board and Chief Executive
Officer................................................... 3,031,500 150,000
W. S. H. Laidlaw, President and Chief Operating Officer..... 2,021,000 100,000
J. B. Collins, Executive Vice President..................... 1,212,600 60,000
J. Y. Schreyer, Executive Vice President.................... 1,212,600 60,000
F. Borden Walker, Senior Vice President..................... 303,150 15,000
All executive officers as a group........................... 9,246,075 457,500
All non-executive officer directors as a group.............. -- --
All non-executive officer employees as a group.............. 16,774,300 830,000
</TABLE>
- ---------------
* The dollar values of the stock options shown with respect to the named
executive officers is the present value on the date of grant, as shown under
the Table "Option/SAR Grants in Last Fiscal Year" under "Elections of
Directors -- Executive Compensation and Other Information," using the
methodology and based on the assumptions stated in that table, and the dollar
values of stock options with respect to all executive officers and all
non-executive officer employees are calculated using the same methodology and
assumptions.
The closing market price of a share of the common stock on March 13, 2000
was $56.75.
Stock options awarded by the compensation committee effective December 1,
1999 become fully exercisable on December 1, 2000, except that options may
become exercisable earlier in full in cases of death, disability, normal
retirement or change of control, but in no event earlier than the date of
stockholders' approval of the 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 1, 2009, except in cases of termination of employment
other than by reason of death, disability or normal retirement, in which case
options remain exercisable only for specified periods thereafter. The exercise
price of these options is $58.13 per share. If an awardee's employment
terminates before the options becoming exercisable, such options will be
forfeited.
29
<PAGE> 33
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 accompanying proxy confers discretionary authority to such
persons to vote on any unanticipated matters.
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 company. 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. Its fees for this
solicitation are not expected to exceed $20,000, exclusive of expenses.
Proposals which stockholders wish to include in the company's proxy
materials relating to the 2001 annual meeting of stockholders must be received
by the company no later than November 27, 2000.
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, or to vote via the internet or by calling the toll-free number as
instructed on the proxy card.
By order of the Board of Directors,
CARL T. TURSI
Secretary
New York, New York
March 27, 2000
30
<PAGE> 34
AMERADA HESS CORPORATION
1185 Avenue of the Americas
New York, New York 10036
March 27, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington Dc 20549
Re: Definitive Proxy Statement and Form of
Proxy of Amerada Hess Corporation ("Registrant")
------------------------------------------------
Ladies and Gentlemen:
Attached for the filing in electronic format pursuant to Rule 14a-6
under the Securities and Exchange Act of 1934, as amended, is the definitive
Proxy Statement and form of Proxy to be used in connection with Registrant's
1999 Annual Meeting of Stockholders. Definitive proxy materials will be
released to security holders commencing today.
Very truly yours,
Carl T. Tursi
Secretary
CTT/jaa
Attachment
<PAGE> 35
Amerada Hess Corporation
PROXY
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 3, 2000
The undersigned hereby appoints John B. Hess and W.S.H. Laidlaw, 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 3, 2000, 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 PROPOSALS 2 and 3 ON THE REVERSE SIDE OF THIS CARD.
Receipt of Notice of the Meeting and of the Proxy Statement is hereby
acknowledged.
AMERADA HESS CORPORATION
P.O. BOX 11213
(continued and to be signed on reverse side.) NEW YORK, N.Y. 10203-0213
<PAGE> 36
------
| |
------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES, AND A VOTE FOR
PROPOSAL 2 AND 3.
1. Election of the following nominees as Directors for three-year terms
expiring in 2003.
[X] For all nominees listed below
[X] Withhold authority to vote for all nominees listed below
[X] Exceptions*
Nominees: P. S. Hadley, J. B. Hess, W. R. Johnson,
J. Y. Schreyer, W. I. Spencer
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions ____________________________________
2. Ratification of the selection of Ernst & Young LLP as independent auditors
for fiscal year ending December 31, 2000.
For [X] Against [X] Abstain [X]
3. Approval of the adoption of the Amended and Restated 1995
Long-Term Incentive Plan.
For [X] Against [X] Abstain [X]
CHANGE OF ADDRESS AND/OR COMMENTS MARK HERE [X]
__|
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.
Dated: __________________________________
Signature(s): ___________________________
_________________________________________
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [X]
(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE.)
