<PAGE>
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 Section 240.14a-11(c) or Section 240.14a-12
Louisiana Land & Exploration
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
Notes:
<PAGE>
[LOGO] LL&E
----
THE LOUISIANA LAND AND EXPLORATION COMPANY
909 Poydras Street
P.O. Box 60350
New Orleans, Louisiana 70160
March 26, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
The Louisiana Land and Exploration Company scheduled to be held on Thursday,
May 9, 1996 at the Pan American Life Auditorium, 11th Floor, Pan American Life
Center, 601 Poydras Street, New Orleans, Louisiana commencing at 9:00 A.M.,
Central Daylight Time. Your Board of Directors and management look forward to
greeting personally those stockholders able to attend.
At the meeting, stockholders are being asked to elect a Board of twelve
Directors to serve for a term of one year, and to transact such other business
as may properly come before the meeting.
It is important that your shares are represented at the meeting whether or
not you plan to attend. Accordingly, we request your cooperation by promptly
signing, dating and mailing the enclosed proxy in the envelope provided for
your convenience.
Sincerely,
/s/ H. Leighton Steward
H. Leighton Steward
Chairman of the Board
and Chief Executive Officer
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
909 Poydras Street
P.O. Box 60350
New Orleans, Louisiana 70160
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
---------------------
To the Stockholders of
THE LOUISIANA LAND AND EXPLORATION COMPANY:
The Annual Meeting of Stockholders of The Louisiana Land and Exploration
Company (the "Company") will be held on Thursday, May 9, 1996 at 9:00 A.M.,
Central Daylight Time, in the Pan American Life Auditorium, 11th Floor, Pan
American Life Center, 601 Poydras Street, New Orleans, Louisiana, for the
following purposes:
(i) To elect a Board of Directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualify; and
(ii) To transact such other business as may properly come before the
meeting.
A copy of the Company's Annual Report to Stockholders for the year 1995 is
enclosed.
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING
AND WISH YOUR STOCK TO BE VOTED, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE ADDRESSED TO FIRST CHICAGO
TRUST COMPANY OF NEW YORK, P.O. BOX 8257, EDISON, NEW JERSEY 08818-9089.
SOLICITATION AND REVOCATION OF PROXIES
Proxies are being solicited on behalf of the Board of Directors of the
Company, and the Company will bear the cost of such solicitation. It is
expected that the solicitation of Proxies will be primarily by mail. Proxies
may also be solicited by officers and employees of the Company at no
additional cost to the Company, in person or by telephone, telegram or other
means of communication. The Company may reimburse custodians, nominees and
fiduciaries holding Capital Stock (as defined below) for their reasonable
expenses in sending proxy material to principals and obtaining their Proxy. In
addition, the Company has engaged D.F. King & Co., Inc., 77 Water Street, New
York, New York, to assist in such solicitation at an estimated fee of $9,500
plus disbursements. Any stockholder giving a Proxy may revoke it at any time
before it is exercised by written notice to the Corporate Secretary of the
Company or by voting in person at the meeting.
It is expected that this Notice of Annual Meeting of Stockholders and Proxy
Statement will first be mailed to stockholders on or about March 26, 1996.
STOCKHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING
Only stockholders of record at the close of business on March 15, 1996,
will be entitled to vote at the Annual Meeting. On that date there were
33,564,814 shares of the Capital Stock, par value $.15 per share, of the
Company ("Capital Stock") outstanding and entitled to be voted at the Annual
Meeting. Each such share is entitled to one vote. Proxies marked as abstaining
(including proxies containing broker non votes) on any matter to be acted upon
by stockholders will be treated as present at the meeting for purposes of
determining a quorum but will not be counted as votes cast on such matters.
1
<PAGE>
BENEFICIAL OWNERSHIP OF SECURITIES
The following table reflects the holdings of the only persons known to the
Company to own beneficially 5% or more of Capital Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL CLASS ON
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP MARCH 15, 1996
------------------------------------ ------------------- --------------
<S> <C> <C>
FMR Corp. ................................... 5,022,119 shares(1) 14.96%
82 Devonshire Street
Boston, Massachusetts 02109
The Equitable Companies Incorporated......... 2,433,580 shares(2) 7.25%
787 Seventh Avenue
New York, New York 10019
Metropolitan Life Insurance Company.......... 2,099,150 shares(3) 6.25%
One Madison Avenue
New York, New York 10010
GSB Investment Mgmt., Inc.................... 2,066,649 shares(4) 6.16%
301 Commerce Street, Suite 1501
Fort Worth, Texas 76102
</TABLE>
- --------
(1) Based on a Schedule 13G dated February 8, 1996, filed with the Securities
and Exchange Commission (the "SEC") by FMR Corp., which has sole voting
power with respect to 24,818 of such shares and sole dispositive power
with respect to all of such shares.
(2) Based on a Schedule 13G dated February 9, 1996, filed jointly with the SEC
by The Equitable Companies Incorporated (the "Equitable Companies"), on
behalf of five French mutual insurance companies, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle, Alpha Assurances I.A.R.D. Mutuelle,
Alpha Assurances Vie Mutuelle and Uni Europe Assurance Mutuelle, as a
group, AXA, Equitable Companies and their subsidiaries, which has sole
voting power with respect to 2,115,150 of such shares, shared voting power
with respect to 24,600 of such shares, sole dispositive power with respect
to 2,429,350 of such shares and shared dispositive power with respect to
4,230 of such shares.
(3) Based on a Schedule 13G dated February 7, 1996, filed with the SEC by
Metropolitan Life Insurance Company ("Metropolitan"), which has sole
voting power with respect to 1,941,050 of such shares and sole dispositive
power with respect to 2,060,650 of such shares. Metropolitan has reported
that its subsidiary, State Street Research and Management Company, Inc.
("State Street"), is the beneficial owner of 2,060,650 shares (with
respect to which State Street has also filed a Schedule 13G with the SEC)
of the total shares identified in the table above.
(4) Based on a Schedule 13G dated February 15, 1996, filed with the SEC by GSB
Investment Management, Inc., which has sole voting power with respect to
965,946 of such shares, sole dispositive power with respect to 1,949,224
of such shares and shared dispositive power with respect to 117,425 of
such shares.
2
<PAGE>
The following table sets forth the amount and percentage of Capital Stock
(including shares held for the account of Executive Officers in The LL&E
Savings Plan and The LL&E Dividend Reinvestment Plan) beneficially owned as of
February 1, 1996 (February 27, 1996 for Mr. Schwarz and March 7, 1996 for
Ms. Suggs) by each nominee for election as a Director of the Company, by each
of the individuals named in the Summary Compensation Table and by all
Executive Officers and Directors of the Company as a group. Beneficial
ownership has been determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, and does not necessarily bear on
the economic incidents of ownership or the right to transfer such shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP OF
SHARES OF CAPITAL PERCENT
NAME OF INDIVIDUAL STOCK(1) OF CLASS
------------------ ----------------- --------
<S> <C> <C>
Richard A. Bachmann.............................. 54,289 *
Jerry D. Carlisle................................ 56,425 *
Robert E. Howson................................. 500 *
Eamon M. Kelly................................... 11,793 *
John O. Lyles.................................... 74,188 *
Kenneth W. Orce.................................. 6,250 *
Victor A. Rice................................... 4,750 *
John F. Schwarz.................................. 500 *
Orin R. Smith.................................... 11,150 *
H. Leighton Steward.............................. 264,045(2) *
Carroll W. Suggs................................. 500 *
Arthur R. Taylor................................. 12,750 *
W.R. Timken, Jr.................................. 85,523(3) *
Carlisle A.H. Trost.............................. 9,021 *
John A. Williams................................. 50,337 *
All Directors and Executive Officers as a group
(22 persons),
including those named above..................... 911,542 2.72%
</TABLE>
- --------
*Less than 1%
(1) Includes the following shares which Directors and Executive Officers had
the right to acquire upon the exercise of options within sixty (60) days
from February 1, 1996: Richard A. Bachmann--29,787 shares, Jerry D.
Carlisle--37,600 shares, Eamon M. Kelly--11,250 shares, John O. Lyles--
42,250 shares, Kenneth W. Orce--1,250 shares, Victor A. Rice--3,750
shares, Orin R. Smith--8,750 shares, H. Leighton Steward--191,887 shares,
Arthur R. Taylor--11,250 shares, W.R. Timken, Jr.--11,250 shares,
Carlisle A.H. Trost--8,750 shares, John A. Williams--34,800 shares, all
Directors and Executive Officers as a group--572,299 shares.
(2) Includes 24,048 shares owned by the Steward Family Limited Partnership,
which is controlled by Mr. Steward and his wife.
(3) Includes 14,873 shares owned by a trust of which Mr. Timken is the advisor
and 43,200 shares owned by various trusts of which Mr. Timken is a co-
trustee or co-advisor. Mr. Timken disclaims beneficial interest in 5,000
of such shares owned by members of his family living in his own home and
11,200 of such shares owned by a trust of which his wife is a co-trustee.
3
<PAGE>
I. ELECTION OF DIRECTORS
Twelve Directors are to be elected, each Director to hold office until the
next Annual Meeting of Stockholders and until their successor is elected and
qualifies. The persons named as proxies on the enclosed Proxy have been
designated by the Board of Directors and intend to vote, unless otherwise
directed, for the nominees listed below. All of such nominees, other than Mr.
John F. Schwarz and Ms. Carroll W. Suggs, were elected at the 1995 Annual
Meeting. A majority of shares present at the meeting cast in favor of a
nominee is required for the election of each of the nominees listed below.
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR POSITION, PRINCIPAL OCCUPATION, BUSINESS
NAME OF NOMINEE AGE SINCE EXPERIENCE AND OTHER DIRECTORSHIPS HELD
--------------- --- --------- --------------------------------------------------
<S> <C> <C> <C>
Richard A. Bachmann..... 51 1989 President and Chief Operating Officer since
September 1995; Executive Vice President, Finance
and Administration, of the Company from May 1985
through September 1995; Chief Financial Officer of
the Company from 1981 through September 1995.
Robert E. Howson(2)..... 64 1995 Chairman of the Board and Chief Executive Officer
of McDermott International, Inc. and McDermott
Incorporated since 1988; Chairman of the Board and
Chief Executive Officer of J. Ray McDermott, S.A.
since January 1995; Director of McDermott
International, Inc., McDermott Incorporated, J.
Ray McDermott, S.A. and Whitney Holding
Corporation.
Eamon M. Kelly(2)(3)(5). 59 1986 President of Tulane University; Director Emeritus
of Hibernia Corp.; Director of Gabelli
Enterprises.
Kenneth W. 52 1994 Partner of the law firm of Cahill Gordon &
Orce(3)(4)(5).......... Reindel, New York, since 1976.
Victor A. Rice(1)(2).... 55 1993 Chairman of the Board of Directors and Chief
Executive Officer of Varity Corporation since 1980
and a Director of Varity Corporation since 1978;
Director of International Murex Technologies, Inc.
and American Precision Industries.
John F. Schwarz......... 59 -- Chairman, President and Chief Executive Officer of
Entech Enterprises, Inc. since 1988; President,
Chief Executive Officer and Director of Energy
Development Corporation from 1989 to 1994;
Director of Entech Enterprises, Inc.
Orin R. Smith(1)(4)(5).. 60 1991 Chairman and Chief Executive Officer of Engelhard
Corporation since January 1995; President and
Chief Executive Officer of Engelhard Corporation
since May 1984, and Director of Engelhard
Corporation or its predecessor company (Engelhard
Minerals & Chemicals Corporation) since 1979;
Director of Vulcan Materials Company, The Summit
Bancorporation, Perkin-Elmer Corporation,
Ingersoll-Rand Company and Minorco.
H. Leighton Stew- 61 1985 Chairman of the Board and Chief Executive Officer
ard(3)(4).............. of the Company since January 1, 1989; President of
the Company from January 1985 through September
1995; Chief Operating Officer of the Company from
January 1985 through December 1988; Director of
First Commerce Corporation and the First National
Bank of Commerce.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR POSITION, PRINCIPAL OCCUPATION, BUSINESS
NAME OF NOMINEE AGE SINCE EXPERIENCE AND OTHER DIRECTORSHIPS HELD
--------------- --- --------- --------------------------------------------------
<S> <C> <C> <C>
Carroll W. Suggs........ 57 -- Chairman of the Board, President and Chief
Executive Officer of Petroleum Helicopters, Inc.
since 1992; Chairman of the Board of Petroleum
Helicopters, Inc. since 1990; Director of
Petroleum Helicopters, Inc., Varco International,
Inc., Irish Helicopters Ltd. (Dublin, Ireland),
Aeroservicios Ranger CA (Caracas, Venezuela) and
Siam Aerospace Co. (Bangkok, Thailand).
Arthur R. Tay- 60 1982 Chairman of Arthur Taylor & Company (private
lor(1)(3)(5)........... investment firm) since 1977; President, Muhlenberg
College since 1992; Dean of the Graduate School of
Business, Fordham University, from 1985 to 1992;
Chairman of The Entertainment Channel from
1981 to 1983; Director of Pitney-
Bowes, Inc., Nomura Pacific Basic Fund, Inc.,
Jakarta Growth Fund, Inc., Japan OTC Equity Fund,
Inc. and Korea Equity Fund, Inc.
W.R. Timken, 57 1972 Chairman of the Board of Directors of The Timken
Jr.(2)(4)(5)........... Company; Director of Trinova Corporation and
Diebold, Inc.
Carlisle A.H. 65 1990 Former Chief of Naval Operations for the United
Trost(1)(2)............ States Navy (1986-1990); Director of Lockheed
Martin Corporation, General Public Utilities
Corporation, General Public Utilities (Nuclear)
and General Dynamics Corporation.
</TABLE>
- --------
(1) Compensation Committee member. Mr. Rice is Chairman of the Committee.
(2) Audit Committee member. Admiral Trost is Chairman of the Committee.
(3) Executive Committee member. Mr. Steward is Chairman of the Committee.
(4) Nominating Committee member. Mr. Smith is Chairman of the Committee.
(5) Finance Committee member. Mr. Timken is Chairman of the Committee.
DIRECTORS' COMPENSATION, COMMITTEES AND MEETING ATTENDANCE
During the last fiscal year, the Board of Directors held ten meetings.
Directors who are not Officers of the Company receive an annual retainer of
$30,000 for their services as Directors, and each such Director receives
$1,000 for each Board meeting attended. Each non-employee member of the Audit
Committee, the Nominating Committee, the Compensation Committee, the Finance
Committee and the Executive Committee receives $1,000 for attendance at each
Committee meeting. In addition, the Chairman of each of the Audit Committee,
the Compensation Committee and the Finance Committee receives an annual
retainer of $5,000. Each non-employee Director may elect to defer all or a
portion of the compensation otherwise payable to him. Amounts deferred in 1994
and prior periods accrue interest at a fixed rate of 18% per annum for
participants who are age 55 and over by the end of the plan year or a fixed
rate of 15% per annum for participants who are below age 55 by the end of the
plan year. Amounts deferred after January 1, 1995 (Plan Year 1995) accrue
interest at a fixed rate of 10% per annum; deferrals after January 1, 1996
(Plan Year 1996) accrue interest at a fixed rate of 8% per annum.
Each non-employee Director receives term life insurance coverage of
$50,000. Upon retirement as a Board member, the coverage is reduced to
$25,000.
Any Director who at the time of retirement has either completed four years
of service as a non-employee Director and is at least seventy years of age or
has completed ten or more years of service as a non-employee Director is
eligible for an annual retirement benefit under the Company's Directors'
Retirement Plan (the "Directors' Plan") equal to the annual Board retainer fee
(excluding meeting and committee fees) in effect at the time of retirement or
as it may be increased from time to time, commencing on the later of the
Director's
5
<PAGE>
retirement or the Director's attaining age seventy. Payments continue until
the Director's death or, in the case of a Director retiring before reaching
age seventy, until payments have been made for a period equal to the period of
the Director's service as a non-employee Director. In the event of a "Change
of Control" of the Company (as defined in the Directors' Plan), Directors will
be credited with a period of service equal to the greater of the period of
such Director's service as a non-employee Director or ten years. Directors
eligible to receive benefits under The LL&E Pension Plan after the effective
date of the Directors' Plan (March 1, 1987) are not eligible to participate in
the Directors' Plan.
The Louisiana Land and Exploration Company 1995 Stock Option Plan for Non-
Employee Directors (the "1995 Plan"), which was adopted by vote of the
stockholders at the 1995 Annual Meeting, provides for an annual grant of an
option to purchase 2,500 shares of Capital Stock to each member of the Board
of Directors of the Company who is not an employee of the Company or of any
affiliate of the Company. Options granted under the 1995 Plan generally are
exercisable in two equal annual installments commencing on the first
anniversary of the date of grant, and may be exercised until their expiration
ten years from the date of grant (unless such options expire at an earlier
date following the non-employee Director's termination of service). The option
price per share of Capital Stock payable upon the exercise of an option under
the 1995 Plan is the Fair Market Value (as defined) of Capital Stock on the
date the option was granted. If a non-employee Director participating in the
1995 Plan ceases to be a Director on account of retirement (and such
participant is otherwise eligible for benefits under the Directors' Plan),
death or disability, or if a "Change of Control" of the Company (as defined in
the 1995 Plan) occurs, all of such participant's options outstanding for six
months or more become immediately and fully exercisable.
During 1992, The Louisiana Land and Exploration Company Foundation pledged
to contribute $50,000 per year for six years for the endowment of the Evelyn
and John G. Phillips Distinguished Chair in Mathematics at Tulane University.
Mr. Phillips, former Chairman of the Board and Chief Executive Officer of the
Company, retired at the 1993 Annual Meeting following many years of
distinguished service to the Company. In addition, the Company regularly makes
charitable contributions to a number of universities, including Tulane
University ($15,650 in 1995) and Muhlenberg College ($10,000 in 1995). Company
Director Eamon M. Kelly is President of Tulane University, and Company
Director Arthur R. Taylor is President of Muhlenberg College.
The Board has five standing committees: the Executive Committee; the
Compensation Committee; the Audit Committee; the Finance Committee; and the
Nominating Committee.
The Compensation Committee administers The Louisiana Land and Exploration
Company 1988 Long-Term Stock Incentive Plan, determines the compensation
policies for Company Officers, and recommends to the entire Board of Directors
the salaries of the two most senior Officers of the Company. During 1995, the
Compensation Committee held two meetings.
The principal functions of the Audit Committee are: to receive reports
prepared by the Company's internal auditors; to recommend the selection,
retention or termination of independent auditors; to review arrangements and
proposals for the overall scope of the annual audit with management and the
independent auditors; and to discuss matters of concern to the Audit Committee
with the independent auditors and management relating to the annual financial
statements and results of the audit. During 1995, the Company's Audit
Committee held four meetings.
The principal functions of the Finance Committee are: to review all major
financings of the Company (including the issuance of securities); to recommend
the size, timing, pricing and terms of any such financing; to review the
Company's financial policies, capitalization and forecasted capitalization; to
evaluate investment programs; to review the Company's continuing financial
arrangements; to review the Company's risk management activities including
derivative and hedging transactions; and such additional duties as may from
6
<PAGE>
time to time be assigned to the Finance Committee by the Board of Directors in
respect of specific financing programs undertaken by the Company. During 1995,
the Company's Finance Committee held four meetings.
The Nominating Committee establishes criteria for the selection of
Directors, seeks out and interviews Director candidates and recommends to the
Board those Director candidates who shall stand for election at the Annual
Meeting of Stockholders and who shall fill interim vacancies. During 1995, the
Company's Nominating Committee held one meeting.
During 1995, each of the incumbent Directors attended at least 75% of the
aggregate of the meetings of the Board of Directors and committees on which
they served.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors and persons who own more than 10% of a
registered class of the Company's equity securities to file initial reports of
ownership and changes in ownership with the SEC and the New York Stock
Exchange. Such Officers, Directors and stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's Executive Officers and
Directors, all persons subject to the reporting requirements of Section 16(a)
filed the required reports on a timely basis, except for C.A. Zackary, Vice
President, Human Resource, who inadvertently failed to include on his timely
filed Form 3 certain shares of stock issued under the Company's 1988 Long Term
Stock Incentive Plan.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth the compensation paid by the Company for
services rendered during each of the last three fiscal years to or for the
accounts of the Chief Executive Officer and the other four most highly
compensated Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- -------------------------- --------
RESTRICTED
STOCK NUMBER OF
OTHER ANNUAL AWARD(S) SECURITIES LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION ($) (2) UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($) (1) (3) OPTIONS/SARS(2) ($) ($) (4)
------------------ ---- ---------- --------- ------------ ---------- --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
H. Leighton Steward..... 1995 $565,000 $300,000 $ 3,990 $ 0 22,500 $133,786 $324,678
Chairman of the Board 1994 $565,000 $ 0 $ 15,300 $ 0 15,000 $ 98,501 $283,736
and Chief Executive 1993 $543,846 $140,000 $107,283 $120,563 13,500 $152,677 $243,524
Officer
Richard A. Bachmann..... 1995 $362,692 $200,000 $ 2,442 $ 0 13,500 $ 89,191 $ 87,761
President, Chief Oper-
ating 1994 $350,000 $ 0 $ 9,775 $ 0 8,600 $ 65,667 $ 68,991
Officer, and Director 1993 $340,385 $ 75,000 $102,383 $120,563 8,600 $100,330 $ 64,350
John A. Williams........ 1995 $226,869 $ 75,000 $108,526 $ 0 5,200 $ 51,281 $ 66,572
Senior Vice President, 1994 $219,000 $ 0 $352,001 $ 0 3,700 $ 30,488 $ 55,276
Exploration and 1993 $213,615 $ 25,000 $373,574 $ 89,781 3,700 $ 43,622 $ 49,722
Production
John O. Lyles........... 1995 $190,000 $ 47,500 $ 846 $ 0 4,500 $ 35,669 $ 91,975
Vice President 1994 $190,000 $ 0 $ 3,600 $ 0 3,000 $ 23,453 $ 75,829
1993 $186,154 $ 20,000 $ 49,215 $ 68,156 3,000 $ 34,898 $ 61,307
Jerry D. Carlisle....... 1995 $189,000 $ 47,300 $ 900 $ 0 5,200 $ 35,669 $ 45,663
Vice President and 1994 $189,000 $ 0 $ 3,600 $ 0 3,000 $ 23,453 $ 40,906
Controller
1993 $184,769 $ 22,500 $ 64,436 $ 90,875 3,000 $ 34,898 $ 33,541
</TABLE>
- --------
(1) "Other Annual Compensation" includes: (i) payment to Mr. Williams in 1995,
1994 and 1993 of $66,135, $347,101 and $333,308, respectively, under The
LL&E Expatriate Program; (ii) tax assistance payments in connection with
the grants of Restricted Stock for 1993 performance made to Messrs.
Steward, Bachmann and Williams in the amounts of $92,833, $92,833 and
$35,441, respectively; and (iii) cash dividends paid on Performance
Shares.
(2) Under The 1988 Long-Term Stock Incentive Plan, restrictions lapse in the
event of a "Change of Control" (as defined).
(3) Messrs. Steward, Bachmann, Williams, Lyles and Carlisle had an aggregate
total of 2,000, 2,000, 667, 500 and 667 shares, respectively, in
Restricted Stock holdings with December 29, 1995 closing values of
$85,750, $85,750, $28,598, $21,438 and $28,598, respectively. The
Restricted Stock has a three year vesting schedule in which one-third of
the shares will vest each year beginning one year from the date of grant.
Dividends are payable on Restricted Stock if and to the extent dividends
are paid on the Company's Capital Stock generally.
(4) "All Other Compensation" includes the following: (i) Company contributions
and allocations in 1995 to its defined contribution plans for the benefit
of Messrs. Steward, Bachmann, Williams, Lyles and Carlisle in the amounts
of $76,864, $46,676, $26,427, $20,946 and $20,789, respectively; (ii)
interest accrued during 1995 in excess of 120% of the applicable federal
interest rate with respect to 1986 through 1995 salary and bonus deferrals
pursuant to the Deferred Compensation Arrangement for Messrs. Steward,
Bachmann, Williams, Lyles and Carlisle in the amounts of $243,494,
$38,204, $38,254, $69,409 and $23,242, respectively; and (iii) the dollar
value of insurance premiums paid by the Company with respect to group term
life insurance for the benefit of Messrs. Steward, Bachmann, Williams,
Lyles and Carlisle in the amounts of $4,320, $2,880, $1,892, $1,620 and
$1,633, respectively.
8
<PAGE>
Stock Option Grants and Exercises
The following table sets forth information concerning individual grants of
stock options under The 1988 Long-Term Stock Incentive Plan made during the
last completed fiscal year to each of the named Executive Officers. The
Company did not grant any stock appreciation rights ("SARs") in 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
--------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED FISCAL YEAR ($/SH) DATE ($)(2)
---- ------------ ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
H. Leighton Steward..... 22,500 5.0% $35.56 03/08/05 $187,055
Richard A. Bachmann..... 13,500 3.0% $35.56 03/08/05 $112,233
John A. Williams........ 5,200 1.2% $35.56 03/08/05 $ 43,230
John O. Lyles........... 4,500 1.0% $35.56 03/08/05 $ 37,411
Jerry D. Carlisle....... 5,200 1.2% $35.56 03/08/05 $ 43,230
</TABLE>
- --------
(1) Fifty percent of the shares granted vested on 3/8/96 and the other fifty
percent vest on 3/8/97.
(2) Black-Scholes Option Pricing Model using a five-year weighted-average
dividend yield (3.06%), volatility based on stock price data over the five
years preceding the grant (0.2401) in order to estimate the values that
might occur over the course of the option term. The yield and volatility
were also reviewed in light of known changes in dividend policy or
corporate restructurings that could have an effect in the future. For the
risk-free rate (5.38%), the Company used the yield on U.S. Treasury Strips
with a time to maturity that approximates the average time held before
exercise, adjusted for the vesting period, of six years (6 years). The
result is a Black-Scholes option value of $8.31 per share. The Company
does not believe that the values estimated by the Black-Scholes model, or
any other model, will necessarily be indicative of the values to be
realized by an executive.
The following table sets forth information concerning each exercise of
stock options (or tandem SARs) and freestanding SARs during the last completed
fiscal year by each of the named Executive Officers and the fiscal year-end
value of unexercised options and SARs.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
TOTAL NO. OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
SHARES OPTIONS HELD AT FY-END SARS AT FY-END($)
ACQUIRED ------------------------- -------------------------
ON VALUE
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
H. Leighton Steward..... 0 $ 0 173,137 30,000 $1,655,098 $216,094
Richard A. Bachmann..... 0 $ 0 20,394 16,143 $ 48,281 $116,889
John A. Williams........ 0 $ 0 32,150 7,050 $ 278,675 $ 50,744
John O. Lyles........... 4,400 $14,575 38,500 6,000 $ 383,375 $ 43,219
Jerry D. Carlisle....... 0 $ 0 38,500 6,700 $ 383,375 $ 48,338
</TABLE>
9
<PAGE>
Long-Term Stock Incentive Plan Awards
The following table sets forth information regarding each award of
Performance Shares made to a named Executive Officer in the last completed
fiscal year under The 1988 Long-Term Stock Incentive Plan.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE UNDER NON-STOCK
PERIOD PRICE-BASED PLANS
UNTIL -------------------------
MATURATION THRESHOLD TARGET MAXIMUM
NUMBER OF OR (NO. OF (NO. OF (NO. OF
NAME SHARES(1) PAYOUT(2) SHARES) SHARES) SHARES)
---- --------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
H. Leighton Steward......... 7,500 3 years 1,250 7,500 11,250
Richard A. Bachmann......... 4,500 3 years 750 4,500 6,750
John A. Williams............ 1,800 3 years 300 1,800 2,700
John O. Lyles............... 1,500 3 years 250 1,500 2,250
Jerry D. Carlisle........... 1,800 3 years 300 1,800 2,700
</TABLE>
- --------
(1) Performance Shares awarded under The 1988 Long-Term Stock Incentive Plan
in conjunction with stock options granted.
(2) Payout of awards is tied to achieving one or more specified levels of
three criteria weighted equally: (1) reduction in long-term debt, with the
threshold amount being a reduction of $180 million, the target being a
reduction of $200 million and the maximum being a reduction of $220
million; (2) three-year average increase in value of proved reserves with
threshold being the maintenance of reserve value, the target being an
increase of 5%, and the maximum payout if the value increases by 10% or
more; and (3) three-year average of Total Shareholder Return relative to
pre-determined peer companies, with threshold being 100% of mean, target
being 110%, and maximum being 120%.
Pension Plans
The following table shows the estimated annual benefits payable to a
covered participant upon retirement at normal retirement age under the
Company's qualified defined benefit plan, as well as non-qualified
supplemental pension plans that provide benefits that would otherwise be
denied participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits, based on remuneration that is covered under the plans
and years of service with the Company and its subsidiaries:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
AVERAGE COMPENSATION 15 20 25 30 35 40
-------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$200,000.............. $ 60,000 $ 80,000 $100,000 $120,000 $140,000 $160,000
$300,000.............. $ 90,000 $120,000 $150,000 $180,000 $210,000 $240,000
$400,000.............. $120,000 $160,000 $200,000 $240,000 $280,000 $320,000
$500,000.............. $150,000 $200,000 $250,000 $300,000 $350,000 $400,000
$600,000.............. $180,000 $240,000 $300,000 $360,000 $420,000 $480,000
$700,000.............. $210,000 $280,000 $350,000 $420,000 $490,000 $560,000
</TABLE>
A participant's remuneration covered by the Company's pension plans is his
or her average base salary (as reported in the Summary Compensation Table)
less elected deferrals for the three plan years during the last ten years of
the participant's career for which such average is the highest. Pension plan
benefits in the Table are determined on the basis of a ten-year certain and
life annuity. The benefits shown are displayed before the application of the
pension plans' offset against social security. As of January 1, 1996, Messrs.
Steward, Bachmann, Williams, Lyles and Carlisle have accrued 13, 14, 9, 11 and
16 years, respectively, under the pension
10
<PAGE>
plans. The Company has also agreed to supplement pension payments for Mr.
Steward as if he had been in the employ of the Company since the date he
joined a former employer (1962). The benefits will be reduced by the amount of
any similar benefits paid Mr. Steward by his former employer. Covered
compensation (base salary less elected deferrals) for Messrs. Steward,
Bachmann, Williams, Lyles and Carlisle for the year ended December 31, 1995,
was $565,000, $362,692, $226,869, $190,000 and $189,000, respectively.
Termination of Employment Arrangements and Certain Transactions
The Company has entered into agreements with Messrs. Steward, Bachmann,
Williams and Louis A. Raspino, Jr., Senior Vice President and Chief Financial
Officer (each a "Termination Agreement") which provide that in the event of an
"involuntary termination" other than for "cause" following a "Change in
Control" of the Company (as such terms are defined in such Termination
Agreements), each such Executive Officer will be entitled to receive from the
Company an amount, grossed up for any excise taxes payable by the individual,
equal to three times the sum of such Executive Officer's highest annual salary
and bonus award during the preceding three years. Each Termination Agreement
also provides the covered Executive Officer in such event with an extension of
various benefit coverages (or cash in lieu of an extension) and acceleration
of vesting under outstanding stock options and restricted stock awards, and
earnout of performance shares at a specified performance level.
Pursuant to the Company's Change in Control Severance Plan for Key
Executives (the "Change in Control Plan"), the Company provides severance
benefits for eligible employees in the event of "involuntary termination"
other than for "cause" following a "Change in Control" of the Company (as such
terms are defined in the Change in Control Plan), in an amount, grossed up for
any excise taxes payable by the individual, equal to twice the sum of such
eligible employee's highest salary and bonus award during the preceding three
years. The Change in Control Plan also provides the covered eligible employee
in such event with an extension of various benefit coverages (or cash in lieu
of an extension) and acceleration of vesting under outstanding stock options
and restricted stock awards, and earnout of performance shares at a specified
performance level. There are currently 12 employees eligible to participate in
the Change in Control Plan, including Messrs. Lyles and Carlisle. Messrs.
Steward, Bachmann, Williams and Raspino are not eligible for severance
benefits under the Plan.
Pursuant to the Company's Special Severance Plan (the "Severance Plan"),
the Company provides severance benefits in the event of "involuntary
termination" of a covered employee as a result of a reduction in the Company's
workforce (i) in the form of a one-time cash payment with a maximum amount of
53 weeks of base salary less applicable withholding taxes required by law, and
(ii) premium payments and administrative charges associated with the
continuation of the covered employee's group health benefits for a period up
to six months. All active employees are covered by the Severance Plan, subject
to certain exceptions provided in the Severance Plan. Messrs. Steward,
Bachmann, Williams, Raspino, Lyles and Carlisle are eligible for severance
benefits under the Severance Plan unless a Change in Control (as defined in
the above agreements and Change in Control Plan) has occurred, in which case
such individuals would be covered by the terms of the agreements and Change in
Control Plan referred to in the preceding paragraphs.
Kenneth W. Orce, a Director of the Company, is a partner of the law firm
Cahill Gordon & Reindel, which firm currently provides, and in 1995 provided,
legal services to the Company.
REPORT ON EXECUTIVE COMPENSATION
Compensation Committee
The Compensation Committee (the "Committee") is responsible for determining
the compensation of Company Officers other than the salaries of the two most
senior Officers of the Company, which are determined by the Board of Directors
based upon the Committee's recommendation. The Committee also administers The
Louisiana Land and Exploration Company 1988 Long-Term Stock Incentive Plan.
11
<PAGE>
The Committee is composed of four non-employee Directors: Messrs. Rice,
Smith, Taylor and Trost. Decisions and recommendations by the Committee are
made on the basis of an assessment of corporate performance and a review of
supporting data, including historical compensation data of other companies
within the industry. The Committee utilizes the services of independent
consultants specializing in executive compensation. Although actions with
respect to various programs are taken at different times, consideration of
each is made in the context of the overall compensation package provided by
the Company.
The Committee has reviewed Section 162(m) of The Internal Revenue Code of
1986, as amended, and the United States Treasury regulations promulgated
thereunder regarding the limitation on the deductibility of annual non-
excludible compensation payments in excess of one million dollars to each of
the five highest paid executive officers. The Committee believes that
compensation to be paid in 1996 will not exceed one million dollars in non-
excluded compensation to any of the named executives.
Compensation Philosophy
The Company's executive compensation program is designed to provide
competitive levels of pay and assist the Company in attracting and retaining
qualified executives. The Committee is committed to the objectives of linking
executive compensation to corporate performance and providing incentives which
align the interests of the Company executives with the interests of its
stockholders. This philosophy underlies executive compensation policies
designed to integrate rewards with the attainment of annual and long-term
performance goals, reward significant corporate performance and recognize
individual initiatives and achievements.
The Committee's objective is to set executive compensation at levels
competitive with others in the Company's industry. However, it is performance
which most significantly influences an individual executive's compensation
level. As a result, actual compensation levels in any particular year may be
above or below those of the Company's competitors, depending upon the
Company's performance. The executive compensation program is comprised of
salary, annual cash incentives and long-term, stock-based incentives. The
following is a discussion of each of the elements of the executive
compensation program along with a description of the decisions and actions
taken by the Committee with regard to 1995 compensation:
Base Salary
Salary ranges for each executive position are established by the Company
based on appropriate external comparisons, internal responsibilities and
relationships to other corporate positions. External comparisons are based
upon survey data compiled and analyzed by an executive compensation consultant
firm and include more than twenty (20) independent oil and gas companies. Most
of the companies identified in the Company's performance graph (the
"Performance Peer Group") are participants in the survey. The analysis and
subsequent recommendations are based on this survey rather than the
Performance Peer Group in order to be more statistically sound and
representative of the industry. An internal analysis of this data is conducted
and the salary ranges for each executive's position (minimum, midpoint,
maximum) are recommended to the Committee based upon a third quartile target
of the appropriate survey data. The midpoint of the salary range represents
the "targeted" salary of the survey data. The salary ranges developed are part
of an executive salary program which is reviewed with the Committee by the
Chief Executive Officer. The program recommendations are based on financial
and operational results, individual contributions to corporate performance and
the historical compensation data of other companies within the industry.
Individual executives' salaries might be set above or below the midpoint
(target) of the salary range for their positions depending upon the assessment
of their contributions to corporate performance. The Committee meets without
the Chief Executive Officer to evaluate his performance and develop
recommendations as to adjustments to his salary. The Committee's
recommendations with respect to the salaries of the Company's top two
Executive Officers are presented to the Board of Directors.
The salary paid to the Chief Executive Officer in 1995 was approved in May
1993. In view of the difficult industry climate existing in May 1994 and 1995,
senior management felt that salary action for executives would
12
<PAGE>
not be appropriate during either year. The Compensation Committee and Board
concurred with senior management's recommendations. However, in the latter
part of 1995 a reorganization at the senior management level occurred. John F.
Greene, Executive Vice President, Exploration and Production, elected to
retire. Richard A. Bachmann, Executive Vice President, Finance and
Administration, and Chief Financial Officer was promoted to the position of
President and Chief Operating Officer. John A. Williams, Vice President, was
promoted to the position of Senior Vice President, Exploration and Production.
Messrs. Bachmann and Williams and certain other Executive Officers who were
promoted received promotional salary adjustments in 1995 to recognize their
expanded duties and responsibilities.
Annual Incentive
Senior management recommended, and the Compensation Committee approved, a
new bonus program for 1995. The 1995 Incentive Bonus Program was a cash bonus
program for which all employees were eligible to participate. This program was
designed to clearly (1) align the compensation of all employees with business
success factors, (2) foster and reinforce a team approach in the broadest
context by including all employees, (3) maintain a commitment to the corporate
strategy, and (4) focus on results. The level of the bonus pool and individual
awards was directly tied to corporate performance relative to (1) long-term
debt reduction, (2) annual reserve replacement ratio, (3) reserve replacement
cost, (4) production volume and (5) total shareholder return versus the return
of our Performance Peer Group. The awards for all corporate staff officers
were based upon the score achieved by the Company against specified targets
relating to the five measurements. The awards of Officers who directly managed
a business unit were calculated on an equal basis between corporate results
and their business unit's results measured against (1) cash flow from
operations pre-tax, (2) annual reserve replacement, (3) reserve replacement
cost and (4) production volumes. The Corporate measurements and targets were
approved by the Committee. The actual bonus amount received by an executive is
determined as a percent of salary within a pre-established range assigned to
the position. The targets are based on the median of the target percentages
and are derived from the same survey used for base salary data. The actual
bonus can range from 0 to 150% of the executive's assigned target percentage.
The Chief Executive Officer met with the Committee to review corporate results
and the determination of the bonus pool based upon the results.
Since the Company performed at 100% of the targets, the Chief Executive
Officer and the other named Executive Officers were awarded an incentive bonus
as reported in the Summary Compensation Table.
Long-Term Incentives
The 1988 Long-Term Stock Incentive Plan (the "Plan") was approved by
stockholders in 1988 for the purpose of "promoting the interests of the
Company and its stockholders by (i) attracting and retaining executives and
other key employees of outstanding ability; (ii) strengthening the Company's
capability to develop, maintain and direct a competent management team; (iii)
motivating executives and other key employees, by means of performance-related
incentives, to achieve longer-range performance goals; (iv) providing
incentive compensation opportunities which are competitive with those of other
major corporations; and (v) enabling such employees to participate in the
long-term growth and financial success of the Company."
Although the Plan authorizes the use of a variety of stock related forms of
compensation, the Company's practice is to grant non-qualified stock options
and Performance Shares. Restricted Stock has been utilized periodically to
recognize exceptional efforts. Previous awards were considered when
determining whether or not to grant additional options, Performance Shares or
Restricted Stock in 1995. The granting of stock options is normally considered
annually except when special events or circumstances warrant otherwise. The
options are granted to employees based upon their potential impact on
corporate results and on their performance. Options are granted at market
value and vest over a two-year period. The maximum number of options
considered for a regular grant is calculated as a percentage of salary divided
by the current market value of the stock. The percentage of salary selected is
determined with the objective of placing the Company's executives at the
median
13
<PAGE>
level of opportunity relative to long-term (stock) incentives among the
companies in the same survey utilized for base salary data and annual
incentive opportunity percentage comparisons. The actual award amount may
range from 0 to 100% of the resulting number of options, depending upon the
assessment of the prior year's performance. Performance Shares are granted in
conjunction with option grants to Executive Officers of the Company. Grants
are made at a ratio of three (3) options for each Performance Share. The
percentage payout of the Performance Shares is based on results of a three-
year cycle and a minimum threshold must be met before any Performance Shares
are earned. Target awards for each of the executives are established at the
beginning of each performance cycle and payout is based upon the following
performance criteria:
1.One-third based upon the Company's reduction in long-term debt (for
the performance cycle commencing in 1995) or the Company's 3-year average
working capital return on total capital employed (for performance cycles
commencing prior to 1995).
2.One-third based upon the Company's 3-year average increase in value of
proved reserves.
3.One-third based upon the Company's 3-year average total stockholder
return (stock appreciation plus dividend yield) relative to the Performance
Peer Group reviewed and approved annually by the Committee.
The actual percentage payout can range from 0% to 150% depending upon the
level of results obtained for each of the specified criteria.
In March 1995, a regular stock option grant was made to Executive Officers
and key employees of the Company. The Committee felt that in light of not
having a salary or bonus program in 1995, it was important to provide
encouragement and incentive for the future. For the Chief Executive Officer
and the other Executive Officers, the grant was comprised of the normal ratio
of three (3) options for each Performance Share.
Compensation Committee
Victor A. Rice
Orin R. Smith
Arthur R. Taylor
Carlisle A.H. Trost
14
<PAGE>
PERFORMANCE GRAPH
The following graphs compare the performance of the Company's Capital Stock
to the S&P 500 Index and to the LL&E Peer Group for the five year period
ending December 31, 1995. Due to the fact that the composition of the LL&E
Peer Group has changed since last year's proxy statement, comparisons with the
previous group and the current group are presented.
The 1994 LL&E Peer Group consists of the Company, Anadarko Petroleum
Corporation, Apache Corporation, Burlington Resources, Inc., Noble Affiliates,
Inc., Oryx Energy Company and Santa Fe Resources, Inc. These seven companies,
plus Maxus Energy Corporation, made up the peer group in last year's
performance graph. Maxus was acquired by another firm in 1995 and, therefore,
was deleted from this year's comparison.
To broaden the base of comparison after the removal of Maxus from the 1994
LL&E Peer Group, the Company added Parker & Parsley Petroleum Company, Pogo
Producing Company and Seagull Energy Corporation to the group in 1995. These
firms are in the same line of business as the Company and were selected on the
basis of comparability of market capitalization. The 1995 LL&E Peer Group is
identical to that used for the Company's 1995 performance-based compensation
program.
The graphs assume a $100 investment each in LL&E Capital Stock, the S&P 500
Index and the 1994 and 1995 Peer Groups on December 31, 1990.
[GRAPH APPEARS HERE]
<TABLE>
1994 LL&E PEER GROUP
<CAPTION>
Measurement period LL&E S & P 500 1994 LL&E
(Fiscal year Covered) Capital Stock Index Peer Group
- --------------------- ------------- --------- ----------
<S> <C> <C> <C>
Measurement PT -
1990 $ 100.00 $ 100.00 $ 100.00
FYE 1991 $ 76.57 $ 130.47 $ 85.07
FYE 1992 $ 85.77 $ 140.41 $ 93.15
FYE 1993 $ 102.87 $ 154.56 $ 108.30
FYE 1994 $ 95.58 $ 156.60 $ 93.82
FYE 1995 $ 113.38 $ 214.86 $ 113.43
</TABLE>
15
<PAGE>
[GRAPH APPEARS HERE]
<TABLE>
1995 LL&E PEER GROUP
<CAPTION>
Measurement period LL&E S & P 500 1995 LL&E
(Fiscal year Covered) Capital Stock Index Peer Group
- --------------------- ------------- --------- ----------
<S> <C> <C> <C>
Measurement PT -
1990 $ 100.00 $ 100.00 $ 100.00
FYE 1991 $ 76.57 $ 130.47 $ 85.57
FYE 1992 $ 85.77 $ 140.41 $ 95.04
FYE 1993 $ 102.87 $ 154.56 $ 114.71
FYE 1994 $ 95.58 $ 156.60 $ 99.23
FYE 1995 $ 113.38 $ 214.86 $ 120.68
</TABLE>
OTHER MATTERS
No business other than the election of a Board of Directors of the Company
is expected to come before the meeting, but should any other matters requiring
a vote of stockholders arise, including any question as to an adjournment of
the meeting, the persons named on the enclosed Proxy will vote thereon
according to their best judgment in the interests of the Company. All shares
represented by valid Proxies, unless otherwise specified, will be voted in the
election of Directors for the nominees named above; provided, however, that in
the event any of such nominees should withdraw or otherwise become unavailable
for reasons not presently known, the persons named as Proxies will vote for
the election of other persons in their place.
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as the firm of
independent accountants to audit the accounts of the Company and its
subsidiaries for the year ending December 31, 1996. This firm expects to have
a representative at the meeting who will have the opportunity to make a
statement and who will be available to answer questions.
16
<PAGE>
STOCKHOLDER PROPOSALS
The Company will not consider including a stockholder's proposal for action
at its 1997 Annual Meeting of Stockholders in the proxy material to be mailed
to its stockholders in connection with such meeting unless such proposal is
received at the principal office of the Company no later than November 26,
1996.
By order of the Board of Directors,
/s/ FREDERICK J. PLAEGER, II
FREDERICK J. PLAEGER, II
Vice President, General Counsel
and Corporate Secretary
Dated: March 26, 1996
YOUR VOTE IS IMPORTANT. STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE
ANNUAL MEETING AND WHO WISH TO HAVE THEIR STOCK VOTED ARE REQUESTED TO SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
17
<PAGE>
PROXY
THE LOUISIANA LAND AND EXPLORATION COMPANY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE LOUISIANA LAND AND
EXPLORATION COMPANY PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS AT
9 O'CLOCK A.M., CENTRAL DAYLIGHT TIME, MAY 9, 1996; PAN AMERICAN
LIFE AUDITORIUM, 11TH FLOOR, PAN AMERICAN LIFE CENTER,
601 POYDRAE STREET, NEW ORLEANS, LOUISIANA
The undersigned hereby appoints H. LEIGHTON STEWARD and RICHARD A.
BACHMANN, and each of them, with power of substitution, as Proxies of the
undersigned to vote all shares of stock which the undersigned is entitled in any
capacity to vote at the above-stated Annual Meeting and at all adjournments and
postponements thereof in the election of directors and, in their discretion,
upon such other matters as may properly be brought before the meeting. This
proxy revokes all prior proxies given by the undersigned.
All properly signed proxies will be voted as directed. If no direction
is made, this proxy will be voted FOR the election of the director nominees
designated on the reverse side.
Receipt of the Notice of Annual Meeting and Proxy Statement is hereby
acknowledged.
(continued and to be signed on reverse side)
<PAGE>
[X] Please mark your 3126
vote as in this
example.
The Directors recommend a vote FOR all of the nominees.
Election of FOR [ ] Richard A. Bachmann, Robert E. Howson, Eamon M.
Directors WITHOLD [ ] Kelly, Kenneth W. Orce, Victor A. Rice, John F.
Schwarz, Orin R. Smith, H. Leighton Steward,
Carroll W. Suggs, Arthur R. Taylor, W.R. Tinkan,
Jr. and Carlisle A.H. Trest
(You may withold a vote for any individual nominee by marking the "FOR" box and
writing that nominee's name on the line provided below)
- --------------------------------
Please sign, date and mail this proxy card
promptly using the enclosed envelope. Joint
owners should EACH sign. Please sign EXACTLY as
your name(s) appear(s) on this card. When
signing as attorney, trustee, executor,
administrator, guardian or corporate officer,
please give your FULL title below.
---------------------------------------------
---------------------------------------------
SIGNATURE(S) DATE
<PAGE>
LL&E
"Nineteen ninety-five was a year of challenge and accomplishment for
LL&E. We set a number of aggressive goals for ourselves and are proud to report
that with the dedication and creativity of all our employees, these goals were
either met or exceeded."
Shareholder Letter, 1995 Annual Report
"In 1995, LL&E's focus in those areas where it has a competitive
advantage combined with its continuing commitment to technology yielded
impressive operating results. The Company replaced 115% of its worldwide
production at a cost of $4.51 per barrel of oil equivalent, a 22% improvement
from year earlier levels. In addition, worldwide production grew 10% while
cash operating costs per unit of production fell 10%."
Summary of Operations, 1995 Annual Report
We invite your attention to our enclosed 1995 Annual Report for more
details on last year's results as well as a look ahead to an exciting drilling
program for 1996.
