UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _____________
Commission file number 0-11871
AMERICAN EXPLORATION COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 74-2086890
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 756-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -----------------------
Common Stock, $.05 par value American Stock Exchange
Depositary Shares, each representing American Stock Exchange
a 1/200 interest in a share of $450
Cumulative Convertible Preferred Stock,
Series C, par value $1.00 per share
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
As of March 15, 1995, there were outstanding 118,144,275 shares of the
Company's Common Stock. The aggregate market value of the voting stock held by
non-affiliates of the Company was $99,425,380 based on the closing price on
March 15, 1995 as reported on the American Stock Exchange.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE REGISTRANT
Set forth below are the names, ages and principal occupations during the
past five years of the directors of the Company. All directors are elected for a
term of one year and serve until their successors are elected and have
qualified.
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION DURING PAST FIVE YEARS AGE SINCE
- ---- ------------------------------------------- --- --------
<S> <C> <C> <C>
Mark Andrews Chairman of the Board and Chief Executive Officer 44 1980
of American (1)
O. Donaldson Chapoton Senior Partner of the law firm of Baker & Botts, 58 1989
L.L.P. (2)
Harry W. Colmery, Jr. Vice President, Capital Guardian Trust Company 71 1990
of Los Angeles (3)
Irvin K. Culpepper, Jr. Vice President, Kelso & Company, a merchant 46 1989
banking firm engaged in the leveraged buyout
business (4)
Walter J.P. Curley Venture capital investments (5) 72 1993
Phillip Frost, M.D. Chairman of the Board and Chief Executive Officer 58 1983
of IVAX Corporation, a pharmaceutical, medical
diagnostic and specialty chemical company (6)
Peter G. Gerry Vice President of Court Square Capital Ltd. 49 1983
and Managing Director of Sycamore
Management Corporation (7)
H. Phipps Hoffstot, III Private investor (8) 38 1983
John E. Justice, III Private investor (9) 66 1980
Mark Kavanagh Chairman of Kavanagh Securities Ltd., an Irish 50 1982
investment company (10)
John H. Moore Petroleum consultant (11) 69 1989
Peter P. Nitze Chairman of Nitze-Stagen & Company, Inc., a real 59 1983
estate and financial consulting firm (12)
<FN>
- ------------
(1) Mr. Andrews is also a director of IVAX Corporation.
(2) Mr. Chapoton has been partner-in-charge of the Washington office of Baker &
Botts, L.L.P. since February 1989. From May 1986 to January 1989, he served
in the U.S. Treasury, most recently (from October 1987 to January 1989) as
Assistant Secretary to the Treasury for Tax Policy. Mr. Chapoton was a
director of American from 1980 to 1986.
(3) Mr. Colmery has been Vice President of Capital Guardian Trust Company of
Los Angeles since 1986.
1
(4) Mr. Culpepper joined Kelso & Company in 1988. From 1986 to 1988, he was
Vice President in charge of Private Finance for New York Life Insurance
Company. Mr. Culpepper is also a director of Pepper Co., Inc. and is a
former director of the New York City Industrial Development Agency.
(5) Ambassador Curley was Ambassador to France from 1988 to 1992 and Ambassador
to Ireland from 1974 to 1977. He is Principal of W.J.P. Curley, a venture
capital company. After serving as Ambassador to France, Ambassador Curley
was reappointed a director of American at the March 30, 1993 Board of
Directors meeting. Prior to being appointed Ambassador to France,
Ambassador Curley was a director of American from 1982 to 1988. Ambassador
Curley is also a director of Sothebys Inc., an advisory director to Paribas
International and Trustee of the Frick Collection in New York City. He is a
former director of Fiduciary Trust International and Coflexip, S.A. (a
French flexible pipe manufacturer).
(6) Dr. Frost has been Chairman of the Board and Chief Executive Officer of
IVAX Corporation since March 1987 and President since 1991. He is the Vice
Chairman of the Board of Directors of North American Vaccine, Inc. Dr.
Frost was also Chairman of the Department of Dermatology of Mount Sinai
Medical Center of Greater Miami from 1972 to 1990. He is also a director of
Intercontinental Bank, NAPRO Therapeutics, Inc. and Whitman Medical Corp.
Dr. Frost is a trustee of the University of Miami. He is also a governor of
the American Stock Exchange.
(7) Mr. Gerry is also Chairman of Seven Up/RC Bottling Company of Southern
California, Inc. and is a former President of Citicorp Venture Capital Ltd.
and director of Pond Hill Homes, Ltd.
(8) Mr. Hoffstot is also Chief Financial Officer of subsidiaries of Pittsburgh
History & Landmarks Foundation.
(9) Mr. Justice was Vice President of the investment banking firm of Lovett
Mitchell Webb & Garrison Inc. from 1984 to 1989.
(10) Mr. Kavanagh is also Chairman of Custom House Docks Development Co. Ltd.
and was a director of Imry International Plc until 1989.
(11) Mr. Moore was Chairman of the Board and Chief Executive Officer of Ladd
Petroleum Corporation from 1986 to 1988. He is also a director of First
Interstate Bank of Denver and is a former director of General Atlantic
Resources.
(12) Mr. Nitze is also a Chairman of Nitze, Stagen & Co., Inc. (New York and
Washington).
</FN>
</TABLE>
COMPENSATION OF DIRECTORS
Each director, other than Mr. Andrews, receives compensation of $2,000 per
year for his services as a member of the Board of Directors. In addition, each
director, other than Mr. Andrews, received $1,000 for each Board or Committee
meeting attended and is reimbursed for certain expenses incurred in attending
meetings of the Board of Directors and committees thereof.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning executive officers is set forth in Item 1. of Part 1
hereof.
2
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Act of 1934 (the "34 Act") requires
American's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities ("Ten Percent
Owners"), to file with the Securities and Exchange Commission ("SEC") and the
American Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of American. Such
officers, directors and Ten Percent Owners are required by SEC regulations to
furnish American with copies of all Section 16(a) forms they file.
To American's knowledge, based solely on review of the copies of such
reports furnished to American and written representations that no other reports
were required, during the fiscal year ended December 31, 1994, the executive
officers, directors and Ten Percent Owners complied with all applicable Section
16(a) filing requirements, except that, due to a misunderstanding, forms were
filed 4 and 29 days late with respect to purchases of the Convertible Preferred
Stock by Messrs. Korell and Nitze, respectively.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
compensation for the years 1994, 1993 and 1992 for American's Chief Executive
Officer and the four highest paid executive officers other than the Chief
Executive Officer who were serving at the end of American's last fiscal year.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
-----------------------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
----------------------- RESTRICTED OPTIONS/SAR'S
NAME AND STOCK (OPTION UNITS) ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS (1) (SHARES) COMPENSATION (2)
- ------------------ ---- -------- -------- ------------ --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Mark Andrews 1994 $270,000 $ 75,000 None None(3) $210,316
Chairman & CEO 1993 270,000 60,000 $430,513 682,000(4) 147,919
1992 270,000 60,000 None 100,000 18,964
John M. Hogan (5) 1994 175,000 65,000 None None(3) 5,437
Senior Vice President and 1993 150,000 50,000 146,766 232,500(4) 1,318
Chief Financial Officer 1992 57,404 20,000 None 225,000 5,566
Harold M. Korell (6) 1994 190,000 50,000 None None(3) 5,437
Senior Vice President - 1993 183,413 57,000 146,766 232,500(4) 1,318
Production 1992 102,083 45,000 None 275,000 9,632
Robert R. McBride, Jr. (7) 1994 140,000 30,000 None None(3) 2,261
Vice President - Production 1993 137,804 28,000 48,922 77,500(4) 1,050
Operations 1992 48,115 35,000 None 75,000 5,900
Steven L. Mueller (8) 1994 140,000 30,000 None None(3) 2,512
Vice President - Exploitation 1993 137,804 28,000 48,922 77,500(4) 1,050
1992 18,952 7,500 None 75,000 338
<FN>
- ------------
(1) Granted in October 1993 under American's 1983 Stock Compensation Plan
("1983 Plan"). One-third of the shares will vest on the second anniversary
of the grant, one-third of the shares will vest on the third anniversary of
the grant and one-third of the shares will vest on the fourth anniversary
of the grant. The total number of shares of Restricted Common Stock held by
the named officers as of December 31, 1994 and the total value thereof
based on the $1.3125 per share closing price of the Common Stock on the
American Stock Exchange at the grant date were as follows: Mr. Andrews -
341,000 shares: $447,563; Mr. Korell - 116,250 shares: $152,578; Mr. Hogan
- 116,250 shares: $152,578; Mr. McBride - 38,750 shares: $50,859 and Mr.
Mueller - 38,750 shares: $50,859. The aggregate number and value of all
Restricted Common Stock Awards totaled: 797,250 shares and $1,046,391. To
the extent paid on shares of Common Stock, dividends will also be paid on
Restricted Common Stock.
3
(2) All other compensation for 1994 consisted of the following: (i) Company
contributions to the 401(k) Plan of $1,050 for each of the named officers;
(ii) $1,941, $754, $754 and $251 in respect of Messrs. Andrews, Hogan,
Korell and Mueller, respectively, representing the difference between the
interest rates charged senior management and the prevailing margin rate in
respect to loans to finance purchases of Common Stock during 1994; (iii)
Company-paid life insurance premiums - for Mr. Andrews of $8,125; (iv)
payment of relocation expenses of Mr. Andrews in connection with
consolidation of the Company in Houston of $199,199; and (v) $3,633,
$3,633, $1,211 and $1,211 in respect of Messrs. Hogan, Korell, McBride and
Mueller, respectively, representing the cash payments to participants
related to the vesting of one quarter of the Option Units under the Phantom
Stock Plan ("Phantom Plan").
(3) 1994 amounts exclude 2,968,000 options granted under the 1994 Stock
Compensation Plan ("1994 Plan") subject to stockholder approval at the 1995
annual meeting. The numbers of options granted under the 1994 Plan, subject
to stockholder approval, were as follows: Mr. Andrews - 400,000 shares; Mr.
Hogan - 200,000 shares; Mr. Korell - 200,000 shares; Mr. McBride - 100,000
shares; and Mr. Mueller - 100,000 shares. In addition, Mr. Andrews was
permitted the opportunity to purchase up to 100,000 shares of Common Stock,
the purchase of which would provide Options with a $1.25 exercise price at
a rate of 8 Options for each share of Common Stock purchased during a
specified period. As of March 31, 1995, Mr. Andrews had purchased the full
100,000 shares of Common Stock which entitles Mr. Andrews to an additional
800,000 Options. In addition, Mr. Hogan and Mr. Korell were each permitted
the opportunity to purchase up to 50,000 shares of Common Stock, the
purchase of which would provide Options with a $1.25 exercise price at a
rate of 8 Options for each share of Common Stock purchased during a
specified period. As of March 31, 1995, Mr. Hogan has not yet exercised his
right to purchase shares of Common Stock to receive the additional Options.
As of March 31, 1995, Mr. Korell had purchased the full 50,000 shares of
Common Stock which entitles Mr. Korell to an additional 400,000 Options.
(4) Granted in October 1993 under American's Phantom Plan. One quarter of the
Option Units vest on each anniversary of the grant.
(5) John M. Hogan joined American in August 1992.
(6) Harold M. Korell joined American in July 1992.
(7) Robert R. McBride, Jr. joined American in October 1992.
(8) Steven L. Mueller joined American in November 1992.
</FN>
</TABLE>
4
OPTION/SAR GRANTS
There were no grants of options, restricted stock awards or stock
appreciation rights during 1994 except those made under the 1994 Plan. The
following table sets forth certain information with respect to the proposed
initial allocation of Awards under the 1994 Plan, which Awards were made subject
to approval of the 1994 Plan by stockholders at the 1995 Annual Meeting.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR
NUMBER GRANTED TO OR BASE TERM
OF OPTIONS EMPLOYEES PRICE EXPIRATION --------------------------
NAME AND POSITION GRANTED IN 1994 ($/UNIT) DATE (1) 5% 10%
----------------- ---------- ---------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark Andrews(2)........... 1,200,000 28.8% $1.25 11/01/2004 $2,443,342 $3,890,614
Chairman of the Board and
Chief Executive Officer
John M. Hogan(3).......... 200,000 4.8% 1.25 11/01/2004 407,224 648,436
Senior Vice President and
Chief Financial Officer
Harold M. Korell(4)....... 600,000 14.4% 1.25 11/01/2004 1,221,671 1,945,307
Senior Vice President --
Production
Robert R. McBride, Jr. ... 100,000 2.4% 1.25 11/01/2004 203,612 324,218
Vice President --
Production Operations
Steven L. Mueller......... 100,000 2.4% 1.25 11/01/2004 203,612 324,218
Vice President --
Exploitation
<FN>
- ----------------
(1) Granted on November 1, 1994. One quarter of the options vest on each
anniversary date of the grant and remain outstanding for a period of 10
years.
(2) Includes 800,000 options awarded to Mr. Andrews with a $1.25 exercise price
at a rate of 8 options for each share of Common Stock purchased during a
specified period. As of March 31, 1995, Mr. Andrews had purchased the full
100,000 shares of Common Stock.
(3) In addition, Mr. Hogan was awarded up to 400,000 Options with a $1.25
exercise price at a rate of 8 options for each share of Common Stock
purchased during a specified period. As of March 31, 1995, Mr. Hogan had
not exercised his right to purchase shares of Common Stock to receive the
additional Options.
(4) Includes 400,000 options awarded to Mr. Korell with a $1.25 exercise price
at a rate of 8 options for each share of Common Stock purchased during a
specified period. As of March 31, 1995, Mr. Korell had purchased the full
50,000 shares of Common Stock.
</FN>
</TABLE>
In addition to the Options granted above, at the election of the employees,
the employees may convert their remaining Option Units granted under the Phantom
Stock Plan in 1993 to Incentive Stock Options at the original Option Unit price.
The Options will vest at the same rate as the Option Units with a term of ten
years from the original Option Units award date. As of March 31, 1995, if all
Option Units are converted, approximately 1,541,131 additional Options will be
issued under the 1994 Plan.
5
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table provides information with respect to the unexercised
options to purchase the Common Stock held by the executive officers named in the
Summary Compensation Table at December 31, 1994. None of these executive
officers exercised any stock options during 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SAR'S HELD AT SAR'S AT
DECEMBER 31, 1994 DECEMBER 31, 1994 (1)(2)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Mark Andrews 327,500 62,500 $ 0 $ 0
Harold M. Korell 162,500 112,500 0 0
John M. Hogan 132,500 92,500 0 0
Robert M. McBride, Jr. 42,500 32,500 0 0
Steven L. Mueller 42,500 32,500 0 0
- ------------
(1) Based on the closing price of the Common Stock on the American Stock
Exchange on December 31, 1994 of $0.9375.
(2) 1994 amounts exclude 4,168,000 options granted under the 1994 Plan subject
to stockholder approval at the 1995 annual meeting which includes the
additional options granted pursuant to the Common Stock purchases by Mr.
Andrews and Mr. Korell.
AGREEMENTS WITH CERTAIN EXECUTIVE OFFICERS AND KEY EMPLOYEES
American has entered into agreements with certain of its executive officers
and key employees providing for certain payments and other benefits upon the
involuntary termination of the employment of such persons, including their
constructive termination following a Change in Control, as defined in the
Compensation Plan, of American. The agreements are intended to promote the
retention of such persons in the service of American by providing them with an
extra measure of financial security. The agreements provide that, upon
involuntary termination, Mark Andrews, the Chief Executive Officer, shall
receive cash payments equal to three times his base annual salary; each of John
Hogan and Harold Korell, Senior Vice Presidents, shall receive cash payments
equal to two times their respective base annual salaries; and each of Harry
Harper, Robert McBride, Steve Mueller, Frank Murphy and Elliott Pew, Vice
Presidents, and Cindy Gerow, Controller, shall receive cash payments equal to
their respective base annual salaries. Such persons will also receive six months
of medical and dental insurance benefits (except for disability coverage) at the
expense of American followed by 18 months of reimbursement for payments made by
such persons for medical and dental insurance continuation coverage in
connection with rights conferred under the Consolidated Omnibus Budget
Reconciliation Act of 1985, vesting of awards under the 1983 Plan and Phantom
Plan and extension by six months of the exercise period for options. In the
event that the termination of employment is not caused by a Change in Control,
the cash payments will be reduced by the value of any Restricted Stock that
vests as a result of the termination. The agreements do not apply in the event
of a termination for cause and provide for reduction of benefits to avoid excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended.
6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SECURITY HOLDERS
The following table sets forth certain information with respect to the only
persons known by American, based on statements filed by such persons pursuant to
Section 13(d) or 13(g) of the 34 Act, to own beneficially in excess of 5% of the
Common Stock as of March 31, 1995.
NUMBER PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES CLASS (1)
- --------------------------------------- -------------- ----------
General Electric Pension Trust 19,955,596 (2) 16.4
3003 Summer Street
Stamford, Connecticut 06904
New York Life Insurance Company 11,481,965 (3) 9.6
51 Madison Avenue
New York, New York 10010
Snyder Oil Corporation 9,161,394 7.8
777 Main Street, Suite 2500
Fort Worth, Texas 76102
Massachusetts Mutual Life 8,421,823 (4) 7.0
Insurance Company
1295 State Street
Springfield, Massachusetts 01111
UNUM Corporation 7,994,391 (5) 6.8
2211 Congress Street
Portland, Maine 04122
- ------------
(1) Pursuant to Rule 13d-3(d)(1) under the 34 Act, the table includes shares of
Common Stock that can be acquired through the exercise of options, warrants
or convertible securities within 60 days. The percent of the class owned by
each such person has been computed assuming the exercise of all such
options, warrants and convertible securities deemed to be beneficially
owned by such person, and assuming that no options, warrants or convertible
securities held by any other person have been exercised.
(2) Includes 3,333,333 shares issuable upon conversion of Convertible Preferred
Stock represented by 200,000 Depositary Shares.
(3) Includes 1,666,667 shares issuable upon conversion of Convertible Preferred
Stock represented by 100,000 Depositary Shares.
(4) Includes 6,295,000 shares of Common Stock and 2,126,823 shares issuable
upon exercise of warrants to purchase Common Stock.
(5) Based upon a Schedule 13G, as amended, filed by UNUM Corporation with the
SEC.
SECURITY OWNERSHIP OF MANAGEMENT
The table below sets forth information concerning the shares of Common
Stock beneficially owned, as of March 31, 1995, by each director, the Chief
Executive Officer and the four other most highly compensated officers who were
serving at the end of American's last fiscal year. Pursuant to Rule 13d-3(d)(1)
under the 34 Act, the table includes shares of Common Stock that can be acquired
through the exercise of options, warrants or convertible securities within 60
days. The percent of the class owned by each such person has been computed
7
assuming the exercise of all such options, warrants and convertible securities
deemed to be beneficially owned by such person, and assuming that no options,
warrants or convertible securities held by any other person have been exercised.
Except as indicated, each individual has sole voting power and sole investment
power over all shares listed opposite his name.
NUMBER OF SHARES PERCENT
OF COMMON STOCK OF CLASS
---------------- --------
Mark Andrews.......................... 2,463,203 (1) 2.1
O. Donaldson Chapoton................. 53,351 *
Harry W. Colmery, Jr.................. 65,569 *
Irvin K. Culpepper, Jr................ -- *
Walter J.P. Curley.................... 110,000 *
Phillip Frost, M.D.................... 2,219,469 (2) 1.9
Peter G. Gerry........................ 11,250 *
H. Phipps Hoffstot, III............... 573,086 (3) *
John E. Justice, III.................. 38,771 *
Mark Kavanagh......................... 213,333 (4) *
John H. Moore......................... 25,305 *
Peter P. Nitze........................ 395,087 (5) *
John M. Hogan......................... 311,699 (6) *
Harold M. Korell...................... 360,084 (7) *
Robert R. McBride, Jr................. 105,653 (8) *
Steven L. Mueller..................... 111,337 (9) *
All directors and executive officers
as a group (19 persons).............. 7,505,744(10) 6.3
- ------------
* Less than one percent
(1) Includes 519,480 shares held directly or indirectly by Mr. Andrews'
children and a company of which Mr. Andrews' wife is a principal
shareholder and a director, and as to which shares he disclaims beneficial
ownership. Also includes 327,500 shares issuable upon exercise of stock
options, 28,908 shares allocated to Mr. Andrews under the ESOP and 13,302
shares allocated to Mr. Andrews under the 401(k) Plan.
(2) Includes 40,000 Depositary Shares.
(3) Includes 408,086 shares over which Mr. Hoffstot shares investment and
voting power and as to which shares he disclaims beneficial ownership.
(4) These shares are owned by Kavex Limited, of which Mr. Kavanagh is Managing
Director. Mr. Kavanagh shares investment and voting power over all such
shares, but disclaims beneficial ownership over 170,666 of such shares.
(5) Includes 288,420 shares owned by general partnerships of which Mr. Nitze is
a general partner and over which he shares voting and investment power and
4,000 Depositary Shares.
(6) Includes 132,500 shares issuable upon exercise of stock options, 1,964
shares allocated to Mr. Hogan under the ESOP and 2,860 shares allocated to
Mr. Hogan under the 401(k) Plan.
(7) Includes 1,000 Depositary Shares, 162,500 shares issuable upon exercise of
stock options, 3,709 shares allocated to Mr. Korell under the ESOP and
2,834 shares allocated to Mr. Korell under the 401(k) Plan.
(8) Includes 42,500 shares issuable upon exercise of stock options, 2,103
shares allocated to Mr. McBride under the ESOP and 2,925 shares allocated
to Mr. McBride under the 401(k) Plan.
(9) Includes 42,500 shares issuable upon exercise of stock options, 35 shares
allocated to Mr. Mueller under the ESOP and 10,677 shares allocated to Mr.
Mueller under the 401(k) Plan.
8
(10) These shares include, for all executive officers other than the Chief
Executive Officer and the four other most highly compensated officers,
246,155 shares issuable upon exercise of stock options, 18,249 shares
allocated under the ESOP and 20,778 shares allocated to officers and
directors under the 401(k) Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
New York Life Insurance Company ("New York Life"), the beneficial owner of
9.6% of the outstanding Common Stock, as calculated pursuant to Rule 13d-3(d)(1)
under the 34 Act, and one of its wholly owned subsidiaries are investors in
certain of American's institutional property acquisition programs. Wholly owned
subsidiaries of New York Life and of American act as general partners of the
NYLOG Programs, a series of producing property acquisition partnerships which
were offered to the public through agents of New York Life and several other
broker dealers. In addition, in April 1994, New York Life established a $40.0
million nonrecourse secured credit facility in favor of a wholly owned
subsidiary of American to be used to acquire interests in the Company's APPL
Programs, a series of institutional limited partnerships and related programs
formed to acquire producing oil and gas properties. The facility provides for a
commitment fee of $200,000 and financing fees of 1.25% of funds advanced and
advances accrue interest at rates varying from 3% to 6% over the 30-day AI/PI
commercial paper rate over the one-year term of borrowings under the facility.
During 1994, the Company borrowed approximately $32.0 million under this
facility and made interest and financing fee payments aggregating $1.4 million.
In early 1995, this facility was retired using existing capacity on the
Company's bank credit facility.
In mid-1990, American agreed to act as liquidator for New York Life in
connection with New York Life's investment in a partnership managed by another
oil company. During 1994, American received payments totaling $134,000 for the
reimbursement of certain costs incurred in providing this service. On December
10, 1993, American and New York Life's subsidiary, New York Life Resources,
Inc., formed Ancon Partnership Ltd., a Texas limited partnership ("Ancon"), into
which New York Life Resources, Inc., as a limited partner, contributed these
properties and American, as general partner, purchased a 20% interest for $1.5
million. American anticipates that New York Life and various affiliates will
contribute additional properties to Ancon in connection with which American is
obligated to purchase a 1% interest and will have the option to purchase an
additional 19% interest therein.
In connection with the stock purchase program adopted by the Compensation
Committee pursuant to which members of management were granted Restricted Stock
and Option Units based, in the case of senior management, upon the number of
shares of Common Stock acquired, the Company permitted senior officers the right
to finance with the Company a portion of the shares acquired. In this
connection, Mr. Andrews, along with four other members of senior management,
financed a portion of the shares acquired. The total amount outstanding of all
such loans as of December 31, 1994 was $134,234, with Mr. Andrews' borrowing
being $65,933. These loans bear interest at the applicable federal rate provided
by Section 1274(d) of the Internal Revenue Code of 1986, as amended, of 3.91%
and are payable semi-monthly over three years.
During 1994, Nitze-Stagen & Company, Inc., of which Peter P. Nitze, a
director of American, is Chairman, performed financial consulting services for
American. American paid this company $40,000 for such services rendered during
1994. During 1994, American paid John H. Moore, a director of American, $9,000
for petroleum consulting services. During 1994, American paid Walter J.P.
Curley, a director of American, $20,000 for financial consulting services. O.
Donaldson Chapoton, a director of American, is a partner in the law firm of
Baker & Botts, L.L.P. During 1994, Baker & Botts, L.L.P. received $337,400 from
the Company for legal services which it provided to American, although Mr.
Chapoton has no direct or indirect material interest in such amount.
9
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized on the 1st day of
May, 1995.
AMERICAN EXPLORATION COMPANY
(Registrant)
By: /s/ MARK ANDREWS
Mark Andrews
Chairman of the Board
and Chief Executive Officer
Date: May 1, 1995
