<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[ ] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Murphy Oil 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF MURPHY OIL CORP. APPEARS HERE]
NOTICE OF ANNUAL MEETING
To the Stockholders of
Murphy Oil Corporation:
The Annual Meeting of Stockholders of Murphy Oil Corporation will be held at
the South Arkansas Arts Center, 110 East 5th Street, El Dorado, Arkansas, on
Wednesday, May 10, 2000, at 10:00 a.m., Central Daylight Time, for the
following purposes:
1. To elect directors to serve for the ensuing year.
2. To vote upon proposed amendments to the Employee Stock Purchase Plan as
described in the Proxy Statement.
3. To approve or disapprove the action of the Board of Directors in
appointing KPMG LLP as the Company's independent auditors for 2000.
4. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on March 13, 2000, the
record date fixed by the Board of Directors of the Company, will be entitled
to notice of and to vote at the meeting or any adjournment thereof. A list of
all stockholders entitled to vote is on file at the offices of the Company,
200 Peach Street, El Dorado, Arkansas 71730.
You may vote your shares by signing and returning the enclosed proxy card or
by telephone as explained on the card.
Walter K. Compton
Secretary
El Dorado, Arkansas
March 29, 2000
<PAGE>
PROXY STATEMENT
March 29, 2000
SOLICITATION
The solicitation of the enclosed proxy is made on behalf of the Board of
Directors of Murphy Oil Corporation (the "Company") for use at the Annual
Meeting of Stockholders to be held on May 10, 2000. It is expected that this
Proxy Statement and related materials will first be mailed to stockholders on
or about March 29, 2000.
The complete mailing address of the Company's principal executive offices is
200 Peach Street, P.O. Box 7000, El Dorado, Arkansas 71731-7000.
VOTING PROCEDURES
The affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting is required for approval of matters
presented at the meeting. Your proxy will be voted at the meeting, unless you
(i) revoke it at any time before the vote by filing a revocation with the
Secretary of the Company, (ii) duly execute a proxy card bearing a later date,
or (iii) appear at the meeting and vote in person. Proxies returned to the
Company, votes cast other than in person, and written revocations will be
disqualified if received after commencement of the meeting. If you elect to
vote your proxy by telephone as described in the telephone voting instructions
on your proxy card, we will vote your shares as you direct. Your telephone
vote authorizes the named proxies to vote your shares in the same manner as if
you had marked, signed and returned your proxy card.
Votes cast by proxy or in person at the meeting will be counted by the
persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum and for purposes of
determining the outcome of any other business submitted at the meeting to the
stockholders for a vote. Abstentions, however, do not constitute a vote "for"
or "against" any matter and thus will be disregarded in the calculation of
"votes cast."
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote and that
the broker or nominee does not have discretionary power to vote on a
particular matter) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which the broker has physically
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as not present and not entitled to vote with
respect to that matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters).
Unless specification to the contrary is made, the shares represented by the
enclosed proxy will be voted FOR all the nominees for director; FOR proposed
amendments to the Employee Stock Purchase Plan; and FOR approval of the
appointment of KPMG LLP as the Company's independent auditors.
VOTING SECURITIES
On March 13, 2000, the record date for the meeting, the Company had
outstanding 45,007,654 shares of Common Stock, all of one class and each share
having one vote in respect of all matters to be voted on at the meeting. This
amount does not include 3,761,445 shares of treasury stock. Information as to
Common Stock Ownership of certain beneficial owners and management is set
forth in the tables on pages 4 ("Security Ownership of Certain Beneficial
Owners") and 5 ("Security Ownership of Management").
ELECTION OF DIRECTORS
C. H. Murphy, Jr., the Company's founder and retired CEO and Chairman, is
not seeking reelection to the Board. The Board of Directors has stated its
intention to request him to serve as a director emeritus. Two other directors,
Vester T. Hughes, Jr. and Lorne C. Webster, have attained retirement age and
are not standing for reelection.
1
<PAGE>
Due to these retirements, the by-laws of the Company, which currently
provide for twelve directors, have been amended effective May 10, 2000 to
provide for nine directors who will be elected at the Annual Meeting of
Stockholders. Proxies cannot be voted for a greater number of persons than the
number of nominees named. The by-laws also provide that the directors elected
at each Annual Meeting of Stockholders shall serve until their successors are
elected and qualified.
To the extent authorized by the proxies, the shares represented by the
proxies will be voted in favor of the election as directors of the nine
nominees whose names are set forth below. If for any reason any of these
nominees is not a candidate when the election occurs, the shares represented
by such proxies will be voted for the election of the other nominees named and
may be voted for any substituted nominees. However, management of the Company
does not expect this to occur. All of management's nominees, except for
Robert A. Hermes, were elected at the last Annual Meeting of Stockholders.
Dr. Hermes was elected by the Board on November 30, 1999. The names of the
nominees, and certain information as to them, are as follows:
<TABLE>
<CAPTION>
Principal occupation or
employment (for more Other public
than the past five years Director company
Name and age unless otherwise stated) since directorships
- ------------ -------------------------- -------- --------------------
<S> <C> <C> <C>
B.R.R. Butler*# Managing Director, 1991 KS Biomedix Holdings
London, England Retired, The British p.l.c.
Age: 70 Petroleum Company p.l.c. Guildford, England
George S. Dembroski+* Vice Chairman, Retired, 1995 Cameco, Inc.
Toronto, Ontario, RBC Dominion Securities Saskatoon,
Canada Limited, Vice Chairman, Saskatchewan,
Age: 65 RBC Dominion Securities Canada
Limited from June, 1981 Electrohome Ltd.
to December 31, 1997. Kitchener, Ontario,
Canada
Claiborne P. Deming(S) President and Chief 1993 First United
El Dorado, Arkansas Executive Officer of the Bancshares, Inc.
Age: 45 Company. El Dorado, Arkansas
H. Rodes Hart(S)*# Chairman and Chief 1975 None
Nashville, Tennessee Executive Officer,
Age: 68 Franklin Industries Inc.,
engaged in the
manufacture of brick and
industrial minerals.
Robert A. Hermes Chairman of the Board, 1999 None
Houston, Texas Purvin & Gertz, Inc., an
Age: 60 international energy
consulting firm since
January 1, 2000,
President, Purvin &
Gertz, Inc. from 1987 to
December 31, 1999.
Michael W. Murphy(S)* President, Marmik Oil Com- 1977 Regions Financial
El Dorado, Arkansas pany, engaged in explora- Corp.
Age: 52 tion for and production Birmingham, Alabama
of oil and gas. Presi-
dent,
Murphy Motor Co., engaged
in automobile dealer-
ships.
R. Madison Murphy(S) Chairman of the Board of 1993 Deltic Timber
El Dorado, Arkansas the Company. Corporation
Age: 42 El Dorado, Arkansas
First United
Bancshares, Inc.
El Dorado, Arkansas
William C. Nolan, Partner, Nolan and 1977 None
Jr.(S)* Alderson, Attorneys.
El Dorado, Arkansas
Age: 60
Caroline G. Theus(S)*# President, Inglewood Land 1985 None
Alexandria, Louisiana and Development Company,
Age: 56 a farming and land
holding corporation.
President, Keller
Enterprises, LLC which
manages investments and
real estate holdings.
</TABLE>
- --------
(S) Executive Committee
+ Audit Committee
* Executive Compensation and Nominating Committee
# Public Policy and Environmental Committee
2
<PAGE>
Claiborne P. Deming, C. H. Murphy, Jr., Michael W. Murphy, R. Madison
Murphy, William C. Nolan, Jr. and Caroline G. Theus are all related by blood.
Michael W. Murphy and R. Madison Murphy are sons of C. H. Murphy, Jr.,
Claiborne P. Deming and William C. Nolan, Jr. are nephews of C. H. Murphy,
Jr., and Caroline G. Theus is a niece of C. H. Murphy, Jr. These six
directors, their spouses, and members of their immediate families directly or
indirectly own in the aggregate approximately 25% of the outstanding Common
Stock of the Company and may be considered the controlling persons of the
Company. See also "Security Ownership of Management" on page 5.
Committees
The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee, the Executive Compensation and Nominating
Committee, and the Public Policy and Environmental Committee.
The Executive Committee is empowered to exercise certain functions of the
Board of Directors when the Board is not in session.
The Audit Committee's functions include an oversight role for the Company's
financial statements and review of the results and scope of the work of the
Company's independent auditors and the Company's internal Auditing Division.
This committee meets with representatives of the independent auditors and with
members of the internal Auditing Division for these purposes.
The Executive Compensation and Nominating Committee administers the
Company's 1992 Stock Incentive Plan and the annual incentive compensation plan
and reviews generally the compensation of all executive and key personnel of
the Company and subsidiaries. This committee specifically determines the
compensation of the Chairman of the Board, the President, and certain other
officers. Other duties and authority of the Executive Compensation and
Nominating Committee, as fixed by the Board of Directors, are as follows:
"The Executive Compensation and Nominating Committee shall have the power
to: propose and consider suggestions as to candidates for membership on the
Board; review and propose to the Board criteria for Board membership and
responsibilities; periodically recommend to the Board candidates for
vacancies on the Board due to resignations or retirements or due to such
standards for composition of Board membership as may from time to time
legally prevail; review and recommend to the Board such modifications to
the prevailing Board of Directors retirement policy as may be deemed
appropriate in light of contemporary standards; and propose to the Board on
or before the February meeting of each year a slate of directors for
submission to the stockholders at the annual meeting."
Stockholders desiring to recommend candidates for membership on the Board of
Directors for consideration by the Executive Compensation and Nominating
Committee should address their recommendations to: Executive Compensation and
Nominating Committee of the Board of Directors, c/o Secretary, Murphy Oil
Corporation, P.O. Box 7000, El Dorado, Arkansas 71731-7000.
The Public Policy and Environmental Committee provides review and oversight
of the Company's policies, programs and practices with regard to
environmental, health and safety compliance and in relation to public issues.
Meetings and Attendance
During 1999 there were eight meetings of the Board of Directors, twelve
meetings of the Executive Committee, three meetings of the Audit Committee,
three meetings of the Executive Compensation and Nominating Committee, and two
meetings of the Public Policy and Environmental Committee. All nominees,
except for Robert A. Hermes, attended a minimum of 75% of the total number of
meetings of the Board of Directors and committees on which they served. Dr.
Hermes did not become a member of the Board until November 30, 1999.
Compensation of Directors
The Company has a standard arrangement for compensation of directors who are
not also employees of the Company. Under this arrangement, for fiscal year
1999, nonemployee directors were compensated at the rate of $30,000 per annum
plus $1,000 for each meeting attended of the Board, the Audit Committee, the
3
<PAGE>
Executive Compensation and Nominating Committee, or the Public Policy and
Environmental Committee. The Chairman of the Board is paid the aforementioned
plus an additional $75,000 per annum. No compensation is paid for attendance
at meetings of the Executive Committee. The Company also reimburses directors
for travel, lodging and related expenses they incur in attending Board and
committee meetings.
The Company adopted a retirement plan for nonemployee directors (the
"Director Retirement Plan") effective May 1, 1994. The Director Retirement
Plan provides a retirement benefit to any nonemployee director with at least
five (5) years of service if retirement occurs at or after the age of 72, or
with at least ten (10) years of service if retirement occurs prior to the age
of 72. The Director Retirement Plan will pay an annual benefit equal to the
annual retainer in effect at the time of the director's retirement. Benefits
will be paid for a period equal to years of service. Payment of retirement
benefits will be in the form of quarterly payments which will commence on the
first day of the calendar quarter following the later of the director's
attainment of age 65 or actual retirement from the Board. If a director dies
prior to retirement from the Board, no benefits will be paid under this plan.
In the event a director dies after retirement from the Board, benefits will be
paid to the surviving spouse, but in no event will the total of such benefits
exceed ten (10) years. If there is no surviving spouse, no benefits will be
paid to any other party, beneficiary or estate.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of December 31, 1999, the following are known to the Company to be the
beneficial owners of more than five percent of the Company's Common Stock:
<TABLE>
<CAPTION>
Amount and
nature of
beneficial
Name and address of beneficial owner ownership(1) Percentage
------------------------------------ -------------- ----------
<S> <C> <C>
AXA Financial, Inc................................. 3,232,925(/2/) 7.2%
1290 Avenue of the Americas
New York, NY 10104
Capital Research and
Management Company................................. 6,098,700(/3/) 13.6%
333 South Hope Street
Los Angeles, CA 90071
First United Bancshares, Inc....................... 2,495,322(/4/) 5.5%
Main and Washington Streets
El Dorado, AR 71730
C. H. Murphy, Jr................................... 3,610,707(/5/) 8.0%
200 N. Jefferson
El Dorado, AR 71730
</TABLE>
- --------
(/1/) Includes Common Stock for which the indicated owner has sole or shared
voting or investment power and is based on each indicated owner's 13G
filing for the period ended December 31, 1999.
(/2/) Joint filing by AXA Financial, Inc. for itself, AXA Conseil Vie Assurance
Mutuelle, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle,
AXA Courtage Assurance Mutuelle and AXA. Total includes 1,459,090 sole
voting power shares; 1,589,450 shared voting power shares; 2,714,525 sole
investment power shares; and 518,400 shared investment power shares.
(/3/) An investment adviser registered under Section 203 of the Investment
Advisers Act of 1940. All shares are sole investment power shares.
(/4/) Shares reported are held in various trust accounts administered by a
wholly owned subsidiary, First United Trust Company, N.A. Total includes
82,069 sole voting and investment power shares and 2,413,253 shared voting
and investment power shares.
(/5/) All shares are shared voting and investment power shares.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of February 15, 2000,
concerning the number of shares of Common Stock of the Company beneficially
owned by all directors and nominees, each of the Named Executives (as
hereinafter defined), and directors and executive officers as a group:
<TABLE>
<CAPTION>
Percent of
Amount and outstanding
nature of (if greater
beneficial than one
Name ownership(1) percent)
---- ------------ -----------
<S> <C> <C>
Basil R. R. Butler................. 2,000 --
George S. Dembroski................ -- --
Claiborne P. Deming................ 1,562,783(/2/)(/3/)(/4/) 3.5(/4/)
H. Rodes Hart...................... 216,670 --
Robert A. Hermes................... 1,000 --
Vester T. Hughes, Jr............... 3,474 --
C. H. Murphy, Jr. ................. 3,610,707(/4/) 8.0(/4/)
Michael W. Murphy.................. 433,359(/4/) --
R. Madison Murphy.................. 2,977,280(/4/) 6.6(/4/)
William C. Nolan, Jr............... 750,397(/4/) 1.7(/4/)
Caroline G. Theus.................. 959,976 2.1
Lorne C. Webster................... 6,220 --
Enoch L. Dawkins................... 54,147(/2/)(/3/) --
Herbert A. Fox, Jr................. 77,992(/2/)(/3/) --
Steven A. Cosse.................... 66,770(/2/)(/3/) --
Ronald W. Herman................... 45,774(/2/)(/3/) --
Directors and executive officers as
a group........................... 8,796,145(/5/) 19.5(/5/)
</TABLE>
- --------
(/1/) Includes Common Stock held by directors and officers or by their spouses
and other household members for which the directors and officers have sole
or shared voting or investment power.
(/2/) Includes shares subject to options exercisable within sixty days in the
following amounts: Deming 118,780; Dawkins 37,500; Fox 54,140; Cosse
54,140; and Herman 33,330.
(/3/) Includes shares of Restricted Stock awarded in 1996 and 1998 pursuant to
the Company's 1992 Stock Incentive Plan. Such shares are subject to
vesting requirements, but the recipient is entitled to vote such shares
upon their issuance.
(/4/) Includes shares for which voting and/or investment power is shared between
two or more of Claiborne P. Deming, C. H. Murphy, Jr., Michael W. Murphy,
R. Madison Murphy and William C. Nolan, Jr.
(/5/) In computing the aggregate number of shares owned by directors and
executive officers as a group, the same shares have not been counted more
than once.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors and
its executive officers are required to report their ownership of the Company's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and the New York Stock Exchange. Specific due dates for these
reports have been established and the Company is required to report in this
proxy statement any failure to file by these dates. In 1999, all officers and
directors satisfied their filing requirements except one Form 4 was not filed
on a timely basis for Michael W. Murphy.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, the Company purchased crude oil from Munoco Company L.C. in the
amount of $103,932. Munoco Company L.C. is an associate of William C. Nolan,
Jr. Purchases from Munoco were made at market prices on terms no more
favorable than those offered to unaffiliated third party sellers.
During 1999, the Company paid a retainer for legal services to Hughes &
Luce, L.L.P. of which Vester T. Hughes, Jr. is a partner. A retainer will also
be paid to the firm in 2000.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the individual
who served as the Company's chief executive officer during 1999 and the four
other most highly compensated executive officers of the Company at the end of
1999 (collectively, the "Named Executives"):
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------- -------------------------------
Awards Payouts
----------------------- ------- All
Other Restricted Securities other
annual stock underlying LTIP compen-
Name and principal Salary Bonus compensation awards options/SARs payouts sation
position Year ($)(1) ($)(2) ($) ($)(3) (#) ($) ($)(4)
- ---------------------- ---- ------- ------- ------------ ---------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Claiborne P. Deming 1999 600,000 351,000 -- -- 20,000 -- 52,855
President and Chief
Executive Officer 1998 591,668 -- -- 495,000 25,000 -- 57,417
Murphy Oil Corporation 1997 537,508 363,000 -- -- 60,000 -- 40,614
Enoch L. Dawkins 1999 341,669 175,000 -- -- 15,000 -- 28,993
President, Murphy
Exploration & 1998 325,002 -- -- 247,500 15,000 -- 31,581
Production Company (a 23,353
100% subsidiary) 1997 305,840 160,000 -- -- 30,000 --
Herbert A. Fox, Jr. 1999 330,000 150,000 -- -- -- -- 28,408
Vice President 1998 315,006 50,000 -- 247,500 15,000 -- 30,292
Murphy Oil Corporation 1997 293,336 175,000 -- -- 30,000 -- 21,556
Steven A. Cosse 1999 290,004 130,000 -- -- 15,000 -- 26,404
Senior Vice President
and General Counsel 1998 267,091 -- -- 247,500 15,000 -- 27,104
Murphy Oil Corporation 1997 244,168 130,000 -- -- 30,000 -- 17,929
Ronald W. Herman 1999 212,500 75,000 -- -- -- -- 17,060
Controller (5) 1998 205,002 -- -- 123,750 6,500 -- 18,128
Murphy Oil Corporation 1997 195,839 60,000 -- -- 15,000 -- 14,043
</TABLE>
- --------
(1) Includes amounts of cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(2) Bonuses were awarded and paid after the end of the year in which they are
reported. Because these payments related to services rendered in the year
prior to payment, the Company reported bonuses as a component of
compensation expense in the prior year.
(3) Represents the closing stock price of unrestricted stock on date of grant
($49.50 on February 3, 1998) times the number of restricted shares
granted. Dividends are being paid on restricted stock at the same rate
paid to all shareholders. Awards are subject to performance based
conditions and are forfeited if grantee terminates for any reason other
than retirement, death or full disability. None of the restricted stock
awards vest in under five years from the date of grant. Based on the
results of specified financial objectives, all of the restricted stock
awards granted in 1994 were forfeited effective December 31, 1998. On
December 31, 1999, Mr. Deming held a total of 15,637 nonvested restricted
shares having a then current value of $897,173; Messrs. Dawkins, Fox and
Cosse each held a total of 7,818 nonvested restricted shares having a then
current value of $448,558; and Mr. Herman held a total of 3,909 nonvested
restricted shares having a then current value of $224,279.
(4) The total amounts shown in this column for 1999 consist of the following:
Mr. Deming: $21,892 -- Dividends on nonvested restricted stock; $30,000 --
Company contributions to defined contribution plan; and $963 -- Benefit
attributable to Company-provided term life insurance policy.
Mr. Dawkins: $10,945 -- Dividends on nonvested restricted stock; $17,085 --
Company contributions to defined contribution plan; and $963 -- Benefit
attributable to Company-provided term life insurance policy.
Mr. Fox; $10,945 -- Dividends on nonvested restricted stock; $16,500 --
Company contributions to defined contribution plan; and $963 -- Benefit
attributable to Company-provided term life insurance policy.
Mr. Cosse: $10,945 -- Dividends on nonvested restricted stock; $14,496 --
Company contributions to defined contribution plan; and $963--Benefit
attributable to Company-provided term life insurance policy.
Mr. Herman: $5,473 -- Dividends on nonvested restricted stock; $10,624 --
Company contributions to defined contribution plan; and $963 -- Benefit
attributable to Company-provided term life insurance policy.
(5) Mr. Herman retired as Controller on March 1, 2000.
6
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to stock options exercised in fiscal
1999 and the fiscal year-end value of unexercised options for the Named
Executives:
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
<TABLE>
<CAPTION>
Number of securities
underlying unexercised Value of unexercised in-
options/SARs at FY-end the-money options/SARs at
Shares (#) FY-end ($)*
acquired on Value ------------------------- -------------------------
Name exercise (#) realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Claiborne P. Deming..... 526 $ 19,166 85,639 75,000 $1,174,667 $624,375
Enoch L. Dawkins........ 5,692 320,531 15,000 45,000 67,219 439,688
Herbert A. Fox, Jr...... -- -- 31,640 30,000 330,939 114,375
Steven A. Cosse......... -- -- 31,640 45,000 330,939 439,688
Ronald W. Herman........ -- -- 22,580 14,000 308,481 49,563
</TABLE>
- --------
* Represents market value of underlying securities at year-end less the
exercise price.
OPTION GRANTS
Shown below is further information on grants of stock options pursuant to
the 1992 Stock Incentive Plan during the fiscal year ended December 31, 1999
to the Named Executives:
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual grants
- ---------------------------------------------------------------------------------------------
Number of Percent of total
securities options/SARs Exercise Grant
underlying granted to or base date
options/SARs employees price Expiration present
Name granted (#)(1)(2) in fiscal year ($/Sh) date value ($)(3)
- ---- ----------------- ----------------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Claiborne P. Deming..... 20,000 6.14% $35.6875 02/02/09 $155,200
Enoch L. Dawkins........ 15,000 4.61% 35.6875 02/02/09 116,400
Herbert A. Fox, Jr...... -- -- -- -- --
Steven A. Cosse......... 15,000 4.61% 35.6875 02/02/09 116,400
Ronald W. Herman........ -- -- -- -- --
</TABLE>
- --------
(1) No stock appreciation rights (SARs) were granted in 1999.
(2) Options granted in 1999 vest 50% at the end of two years and 100% at the
end of three years from the date of grant and are exercisable for a period
of 10 years from the date of grant.
(3) Values were based on the Black-Scholes option pricing model adapted for
use in valuing executive stock options. The actual value, if any, an
executive may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised. There is no
assurance that value realized by the executive will be at or near the
value estimated by the Black-Scholes model. The estimated values under
that model are based on arbitrary assumptions as to certain variables and
in 1999 included the following:
<TABLE>
<S> <C>
. Risk-free rate of return 4.77%
. Stock volatility 24.21%
. Dividend yield 2.87%
. Expected life of option 5 years
</TABLE>
Based on the Black-Scholes option pricing model, using the above
assumptions, the options granted in 1999 have been valued at $7.76 per
share as of the grant date.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Executive Compensation and Nominating Committee of the
Board of Directors of the Company during 1999 were Messrs. Butler, Dembroski,
Hart, Hughes, C. H. Murphy, Jr., Michael W. Murphy, Nolan, and Webster and Ms.
Theus.
C. H. Murphy, Jr. was Chairman of the Board of the Company from June 1, 1972
to October 1, 1994. In 1999, the Company purchased crude oil from Munoco
Company L.C. in the amount of $103,932. Munoco Company L.C. is an associate of
William C. Nolan, Jr. Purchases from Munoco were made at market prices on
terms no more favorable than those offered to unaffiliated third party
sellers. During 1999, the Company paid a retainer for legal services to Hughes
& Luce, L.L.P. of which Vester T. Hughes, Jr. is a partner. A retainer will
also be paid to the firm in 2000.
COMPENSATION COMMITTEE REPORT FOR 1999
The Executive Compensation and Nominating Committee (the "Committee") of the
Board of Directors of the Company, which is comprised entirely of independent
outside directors, has prepared this Compensation Committee Report which
describes the guiding principles followed by the Company in establishing its
pay practices and reviews compensation decisions which were made during 1999
affecting the Named Executives.
Executive Compensation Philosophy and Principles
The Company's executive compensation programs and plans are based on
principles designed to align the interests of executives with those of
stockholders and provide a direct link with the Company's values, objectives,
business strategy and financial results. The following general guidelines have
been adopted by the Committee and have been used as the basic architecture for
all executive compensation and benefit arrangements for the Company:
. All programs are directed toward attracting and retaining key executives
who are critical to the long-term success of the Company and each of its
business units and who exhibit a high degree of business responsibility,
personal integrity and professionalism.
. These programs are designed to reward executives for both the short-term
and long-term achievements of Company and business unit objectives that
lead to the enhancement of shareholder value.
. All pay and benefit programs are intended to be competitive within each
industry segment, with upside opportunity and downside risk linked to the
achievement of annual and long-term performance objectives which are
regularly reviewed and approved by the Committee.
At the present time, executive compensation programs consist of base salary,
an annual cash incentive plan and long-term incentives in the form of both
stock options and performance-based restricted stock. The executive benefits
that are offered are typical of those provided by others in the industry. Each
of these compensation arrangements is briefly reviewed in the following
sections.
Base Salary Practices
The Named Executives and other employees are compensated within established
salary range guidelines that are generally based on similar positions in
companies that are comparable to the Company in size, complexity, and industry
orientation. The actual base pay level for each officer is based on a
combination of experience, performance and other factors that are determined
to be important by the Committee. Each year, the Company participates in
salary surveys within each industry segment and from time to time uses the
services of outside consultants to further supplement its competitive
information. The petroleum industry survey in which the Company participates
contains over 25 corporations that the Committee believes are representative
of the Company's labor market for management talent. The survey is conducted
by a major compensation consulting firm. Many of the companies in the survey
group are included in the S&P Oil
8
<PAGE>
(Domestic Integrated) Index line on the performance graph as shown on page 11.
The Committee generally targets the base salary of most officers to be at or
near the median (50th percentile) of the competitive market. The actual
salaries and the amount of increases for 1999 for the Named Executives were
near the median levels of the salaries in the referenced survey. The base
salary of most officers is reviewed annually, with the amount of any increases
reflecting factors such as Company performance, general economic conditions,
marketplace compensation trends and individual performance. In determining
base salary and increase in salaries, the most important criteria in the
Committee's analysis are marketplace comparisons and individual performance.
Overall corporate performance, including the Company's improvement in earnings
and total shareholder return, were also considered by the Committee in making
salary adjustments in 1999.
Annual Incentive Compensation Program
The Company restructured its annual incentive compensation plan in 1996. The
plan concept follows many of the precepts of economic value added and measures
the Company's ability to earn a return on capital that exceeds the weighted
average cost of capital as well as the improvement in the Company's return on
capital. The specific performance measure used for the 1999 performance year
was developed based upon a projection of the Company's weighted average cost
of capital. All participants in the plan, including the Named Executives, were
measured on this corporate-wide measure of Company performance. In 1999, the
Company met its return on capital employed performance target and therefore
achieved its targeted payout. As a result, the Named Executives received
annual incentive awards for the 1999 plan year under the plan's formula.
Long-Term Incentive Compensation
Under the 1992 Stock Incentive Plan (the "1992 Plan") as approved by the
Company's stockholders, long-term incentives may be provided through stock
options, stock appreciation rights and performance-based restricted stock, all
designed to increase the stock ownership of management and link these key
individuals directly to stockholders. All long-term incentive awards granted
during 1999 were granted under the 1992 Plan. Where appropriate, the Committee
uses the Black-Scholes option valuation model to determine the expected value
of stock options. Under the 1992 Plan, the Committee may award up to one
percent of the total issued and outstanding shares as of December 31 of the
immediately preceding year for executive long-term incentives. The 1992 Plan
also has a carry forward feature which allows the Committee to use unawarded
shares from years that were below the threshold to grant awards in a
particular year that may exceed this utilization level. In 1999, the Company
made grants which were .72% of total Company shares outstanding.
A stock option granted under the 1992 Plan gives the executive the right to
purchase a specified number of shares of the Company's Common Stock at an
option price equal to the market price on the date the option was granted.
Options, which may be either nonqualified stock options or incentive stock
options, vest 50% at the end of two years and 100% at the end of three years
from the date of grant and are exercisable for a period of 10 years from the
date of grant. The size of option grants awarded each year is based on
competitive practices in general industry using comparative data provided by a
major compensation consulting firm. The Company's stock option grants in 1999
were generally between the 25th and 50th percentile levels of general industry
practices. In addition, the Committee considers the total number of grants
each executive has been awarded in recent years in determining whether to
grant additional stock options or performance-based restricted stock.
Nonqualified stock options were granted in 1999 to certain Named Executives;
however, no stock appreciation rights were granted in 1999.
On a biennial basis, the Company may grant performance-based restricted
shares to key executives, including the Named Executives. These restricted
share grants are totally performance-based in that the restrictions will only
be lifted and the shares earned in the event that the Company meets or exceeds
its performance target. The performance target for restricted share grants is
the Company's total shareholder return as compared to a selected peer group of
integrated oil and gas companies over a five-year performance period. During
this five-year performance period executives are extended voting and dividend
rights on their restricted shares. No performance-based restricted shares were
granted in 1999 to the Named Executives.
9
<PAGE>
In 1997, the stockholders of the Company approved an amendment to the 1992
Plan to limit the number of awards to any one individual and to specify the
performance criteria for performance-based restricted shares in compliance
with Section 162(m) of the Internal Revenue Code.
Discussion of 1999 Compensation for the President and Chief Executive Officer
Claiborne P. Deming served as President and Chief Executive Officer of the
Company for fiscal year 1999. During 1999, the Committee made the following
determinations regarding Mr. Deming's compensation:
Due to the Company's failure to achieve its budgeted net income and return
on capital employed minimum performance level for 1998, Mr. Deming requested
that he receive no base salary adjustment during 1999.
As noted earlier, the Company restructured its annual incentive compensation
plan in 1996 to focus upon financial performance, as measured by return on
capital employed, which should lead to the enhancement of shareholder value.
As a participant in the plan, Mr. Deming earned an annual incentive award of
$351,000. The performance criteria of the plan was the Company's 1999 return
on capital employed.
In 1999, Mr. Deming received a grant of 20,000 nonqualified stock options at
an exercise price of $35.6875, which was the fair market value of the
Company's stock on the date of the grant. These options will vest 50% two
years from the date of grant and 100% three years from the date of grant. The
option grant was made in recognition of both Mr. Deming's performance and that
of the Company in 1998 and early 1999. Mr. Deming's grant was below the 25th
percentile of competitive practice based upon survey data provided by a major
compensation consulting firm. The compensation consulting firm assisted the
Committee in determining the size of the stock option grant to Mr. Deming and
all other Company executives.
The Executive Compensation and Nominating Committee members during 1999
were, and this Compensation Committee Report is submitted by, Messrs. Butler,
Dembroski, Hart, Hughes, C. H. Murphy, Jr., Michael W. Murphy, Nolan, and
Webster, and Ms. Theus.
10
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following line graph presents a comparison of the cumulative five-year
shareholder returns (including the reinvestment of dividends) for the Company,
the Standard and Poor's 500 Stock Index (S&P 500 Index) and the S&P Oil
(Domestic Integrated) Index.
[PERFORMANCE GRAPH APPEARS HERE]
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Murphy Oil Corporation $100 $101 $139 $156 $123 $176
S&P 500 Index 100 138 169 226 290 351
S&P Oil (Domestic Integrated) Index 100 114 144 171 139 173
</TABLE>
- -------------------------------------------------------------------------------
Data are provided by Standard & Poor's Compustat.
11
<PAGE>
RETIREMENT PLANS
The following table shows the estimated annual pension benefit payable, at
age 65, under Murphy Oil Corporation's Retirement Plan at December 31, 1999
for the compensation and length of service indicated. The amounts shown are
subject to reduction for social security benefits.
Pension Plan Table--Murphy Oil Corporation Plan
<TABLE>
<CAPTION>
Years of Service
------------------------------------------------------------------------------
Remuneration(/1/) 15 20 25 30 35 40
- ----------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$150,000 $ 36,000 $ 48,000 $ 60,000 $ 72,000 $ 84,000 $ 96,000
200,000 48,000 64,000 80,000 96,000 112,000 128,000
250,000 60,000 80,000 100,000 120,000 140,000(/2/) 160,000(/2/)
300,000 72,000 96,000 120,000 144,000(/2/) 168,000(/2/) 192,000(/2/)
350,000 84,000 112,000 140,000(/2/) 168,000(/2/) 196,000(/2/) 224,000(/2/)
400,000 96,000 128,000 160,000(/2/) 192,000(/2/) 224,000(/2/) 256,000(/2/)
450,000 108,000 144,000(/2/) 180,000(/2/) 216,000(/2/) 252,000(/2/) 288,000(/2/)
500,000 120,000 160,000(/2/) 200,000(/2/) 240,000(/2/) 280,000(/2/) 320,000(/2/)
600,000 144,000(/2/) 192,000(/2/) 240,000(/2/) 288,000(/2/) 336,000(/2/) 384,000(/2/)
700,000 168,000(/2/) 224,000(/2/) 280,000(/2/) 336,000(/2/) 392,000(/2/) 448,000(/2/)
800,000 192,000(/2/) 256,000(/2/) 320,000(/2/) 384,000(/2/) 448,000(/2/) 512,000(/2/)
- --------
(/1/) During 1999, the maximum compensation limit for qualified retirement
plans, as established by the Internal Revenue Service, was $160,000
(increases to $170,000 for 2000).
(/2/) Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan. In 1999, the maximum
benefit allowable was $130,000 (increases to $135,000 for 2000).
A portion of the benefits shown above would be paid under the Company's
Supplemental Benefit Plan to the extent such benefits exceed legislative
limitations.
The credited years of service for Messrs. Deming, Fox, Cosse and Herman are
twenty-one years, thirty years, twenty years and twenty-three years,
respectively.
As of January 1, 1992, employees of Murphy Exploration & Production Company,
formerly named Ocean Drilling & Exploration Company (ODECO), began
participating in the Company's plans. Prior to that time such employees
participated in similar plans of ODECO. Employees of the Company or one of its
100% owned subsidiaries who were previously included in the ODECO Retirement
Plan may receive a benefit upon retirement which is based on a combination of
the Company and ODECO plans. The following table indicates the estimated
annual benefit computed on a straight life annuity basis payable, at age 65,
under the ODECO plan for the salary and length of service indicated:
Pension Plan Table--ODECO Plan
<CAPTION>
Years of Service
------------------------------------------------------------------------------
Remuneration 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $ 59,352 $ 79,082 $ 98,812 $118,542 $138,272* 158,002*
250,000 74,352 99,082 123,812 148,542* 173,272* 198,002*
300,000 89,352 119,082 148,812* 178,542* 208,272* 238,002*
350,000 104,352 139,082* 173,812* 208,542* 243,272* 278,002*
400,000 119,352 159,082* 198,812* 238,542* 278,272* 318,002*
</TABLE>
- --------
* Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan.
The above tables do not reflect any reductions in retirement benefits that
would result from the selection of one of either plan's various available
survivorship options nor the actuarial reductions required by the plans for
retirement earlier than age 62.
12
<PAGE>
The credited years of service for Mr. Dawkins are thirty-four years.
It is not feasible to calculate the specific amount attributable to the
plans in respect to each employee. The Company had no required contributions
to the retirement plans in 1999 and therefore no contributions were made.
PROPOSED AMENDMENTS TO THE EMPLOYEE STOCK PURCHASE PLAN
At the May 14, 1997 Annual Meeting, the stockholders approved an Employee
Stock Purchase Plan (the "Plan") covering 50,000 shares of Common Stock. The
Plan, qualified under section 423 of the Internal Revenue Code, provides
eligible employees with an opportunity to purchase shares at a ten percent
(10%) discount via payroll deduction and thereby obtain or increase a
proprietary interest in the Company.
The text of the Plan was included in the Proxy Statement for the 1997 Annual
Meeting. Copies of the Plan are available free of charge upon request.
Requests should be directed to the Secretary, Murphy Oil Corporation, P. O.
Box 7000, El Dorado, Arkansas 71731-7000, telephone (870) 862-6411.
As of December 31, 1999, 39,496 shares have been purchased by employees
pursuant to the Plan. The proposed amendments, detailed in Exhibit A, would
increase the maximum number of shares available for sale under the Plan from
50,000 shares to 150,000 shares. Also, the term of the Plan would be extended
from five (5) years to ten (10) years.
The Board of Directors recommends that the shareholders vote FOR the
proposed amendments to the Employee Stock Purchase Plan. Proxies solicited on
behalf of the Board will be voted FOR this proposal.
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors desires that the stockholders indicate their approval
or disapproval of the Board's action in appointing KPMG LLP, Certified Public
Accountants, as independent auditors of the Company for the year 2000. KPMG
LLP has been serving the Company and its subsidiaries as independent auditors
for many years. The firm has advised the Company that its members have no
direct or indirect financial interest in the Company or any of its
subsidiaries. Members of the firm are expected to be present at the Annual
Meeting for the purpose of responding to inquiries by stockholders, and such
representatives will have an opportunity to make a statement if they desire to
do so.
In the event a majority of the stockholders voting should indicate
disapproval of the appointment of KPMG LLP, the adverse vote will be
considered as a directive to the Board of Directors to select other auditors
for the following year. Because of the difficulty and expense of making any
substitution of auditors during a year, it is contemplated that the
appointment for 2000 will be permitted to stand unless the Board finds other
good reason for making a change.
The Board of Directors recommends that shareholders vote FOR approval of the
appointment of KPMG LLP as independent auditors for the year 2000. Proxies
solicited on behalf of the Board will be voted FOR this proposal.
STOCKHOLDER PROPOSALS
Stockholder proposals for the Annual Meeting of Stockholders in the year
2001 must be received by the Company at its executive offices on or before
December 1, 2000 in order to be considered for inclusion in the proxy
materials.
13
<PAGE>
OTHER INFORMATION
The management of the Company knows of no business other than that described
above that will be presented for consideration at the meeting. If any other
business properly comes before the meeting, it is the intention of the persons
named in the proxies to vote such proxies thereon in accordance with their
judgment.
The expense of this solicitation, including cost of preparing and mailing
this Proxy Statement, will be paid by the Company. Such expenses may also
include the charges and expenses of banks, brokerage houses and other
custodians, nominees or fiduciaries for forwarding proxies and proxy material
to beneficial owners of shares.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
Walter K. Compton
Secretary
El Dorado, Arkansas
March 29, 2000
PLEASE COMPLETE AND RETURN YOUR PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED IF IT IS MAILED IN THE UNITED STATES
OF AMERICA. ALTERNATIVELY, YOU MAY VOTE BY
TELEPHONE AS DESCRIBED ON THE PROXY CARD.
14
<PAGE>
EXHIBIT A
PROPOSED AMENDMENTS TO THE EMPLOYEE STOCK PURCHASE PLAN
Paragraph 12. Shares is amended by changing the first sentence of
subsection (a) so as to read:
"The maximum number of Shares which shall be made available for
sale under the Plan shall be one hundred fifty thousand
(150,000) Shares, subject to adjustment upon changes in
capitalization of the Company as provided in paragraph 17."
Paragraph 22. Term of Plan is amended by changing the second
sentence so as to read:
"It shall continue in effect for a term of ten (10) years unless
sooner terminated under paragraph 18 or 20."
<PAGE>
MURPHY OIL CORPORATION
PLEASE MARK VOTE IN OVAL USING DARK INK ONLY.
The Board of Directors Recommends a Vote "FOR" Each of the Listed Proposals.
1. Election of Directors--
01 - B.R.R. Butler 04 - H.R. Hart 07 - R.M. Murphy
02 - G.S. Dembroski 05 - R.A. Hermes 08 - W.C. Nolan, Jr.
03 - C.P. Deming 06 - M.W. Murphy 09 - C.G. Theus
For All Withhold All For All
[_] [_] [_]
(Except Nominee(s) written below)
-----------------------------------------
-----------------------------------------
2. Proposed amendments to the Employee Stock Purchase Plan.
For All Against Abstain
[_] [_] [_]
3. Approve the appointment of KPMG LLP as independent auditors.
For All Against Abstain
[_] [_] [_]
Dated: _________________________________________________________, 2000
________________________________________________________________________________
________________________________________________________________________________
Please sign exactly as your name or names appear hereon. For joint accounts,
each owner should sign. When signing as executor, administrator, attorney,
trustee or guardian, etc., please give your full title. Please return promptly.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
CONTROL NUMBER
INSTRUCTIONS FOR VOTING BY TELEPHONE OR MAIL
Murphy Oil Corporation encourages you to take advantage of new and convenient
ways to vote your shares for proposals to be covered at the Annual Meeting of
Stockholders. Please take this opportunity to use one of the two voting methods
detailed below to vote your shares. This year, voting has been made easier than
ever.
VOTE BY PHONE. Call toll-free at 1-877-482-6137 using a touch-tone telephone
to vote 24 hours a day, 7 days a week. Have your proxy card (above) and
social security number in hand when you call. Please enter the 6-digit
control number which is located to the left and above, just below your proxy
card.
To vote as the Board of Directors recommends on ALL proposals, press
Option 1 1. Your vote will be confirmed and cast as directed and the call
will end. If you wish to vote on each proposal separately, press 0.
Option 2 If you selected 0 to vote on each proposal separately, you will hear
these instructions:
Proposal 1 (Election of Directors) - To vote FOR all nominees, press
1; to WITHHOLD for all nominees, press 9; to WITHHOLD for AN
INDIVIDUAL nominee, press 0 and enter the two digit number that
appears on the proxy card (above) next to the name of the nominee
you DO NOT wish to vote for. Once you have completed voting for
Directors, press 0.
The Board of Directors recommends a vote FOR Proposal 1.
Proposal 2 (Proposed amendments to the Employee Stock Purchase
Plan) - To vote FOR, press 1; to vote AGAINST, press 9; to ABSTAIN,
press 0. Your vote selection will be repeated and you will have an
opportunity to confirm it.
The Board of Directors recommends a vote FOR Proposal 2.
Proposal 3 (Approve the appointment of KPMG LLP as independent
auditors) - To vote FOR, press 1; to vote AGAINST, press 9; to
ABSTAIN, press 0. Your vote selection will be repeated and you will
have an opportunity to confirm it.
The Board of Directors recommends a vote FOR Proposal 3.
VOTE BY MAIL. Please vote, sign, date and return your proxy card (above)
using the enclosed postage-paid envelope.
If you vote by telephone please do not mail your proxy card.
THANK YOU FOR VOTING
<PAGE>
[MURPHY OIL CORPORATION LOGO]
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 10, 2000
The stockholder(s) whose name(s) appears on the reverse side hereby appoints
R. Madison Murphy and Claiborne P. Deming, or each of them, as the
stockholder's proxy or proxies, with full power of substitution, to vote all
shares of Common Stock of Murphy Oil Corporation which the stockholder is
entitled to vote at the Annual Meeting of Stockholders to be held at the South
Arkansas Arts Center, 110 East 5th Street, El Dorado, Arkansas, on May 10,
2000, at 10:00 a.m., Central Daylight Time, and any adjournments thereof, as
fully as the stockholder could if personally present.
IMPORTANT -- This Proxy, if mailed, must be signed and dated on the reverse
side.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NONE ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED ON THE REVERSE SIDE, AND FOR PROPOSALS 2 and 3.
(continued on reverse side)
