<PAGE> 1
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
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
NOBLE AFFILIATES, INC.
(Name of Registrant as Specified In Its Charter)
NOBLE AFFILIATES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
( ) $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:(1)
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
<PAGE> 2
NOBLE AFFILIATES, INC.
110 WEST BROADWAY
ARDMORE, OKLAHOMA 73401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 1994
To the Shareholders of
NOBLE AFFILIATES, INC.:
The annual meeting of shareholders of Noble Affiliates, Inc., a Delaware
corporation (the "Company"), will be held on Tuesday, April 26, 1994, at 10:00
a.m., local time, at the Charles B. Goddard Center, D Street and First Avenue,
S.W., Ardmore, Oklahoma, for the following purposes:
1. To elect the Board of Directors for the ensuing year; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 14, 1994
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof. Only shareholders of
record at the close of business on the record date are entitled to notice of
and to vote at the meeting. A complete list of such shareholders will be
available for examination at the offices of the Company in Ardmore, Oklahoma,
during ordinary business hours for a period of 10 days prior to the meeting.
A record of the Company's activities during 1993 and financial statements
for the fiscal year ended December 31, 1993 are contained in the accompanying
1993 Annual Report. The Annual Report does not form any part of the material
for solicitation of proxies.
All shareholders are cordially invited to attend the meeting.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY PLAN TO ATTEND THE MEETING, TO
COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND TO RETURN IT PROMPTLY IN THE
POSTAGE-PAID RETURN ENVELOPE PROVIDED. If a shareholder who has returned a
proxy attends the meeting in person, such shareholder may revoke the proxy and
vote in person on all matters submitted at the meeting.
By Order of the Board of Directors
Orville Walraven
Secretary
Ardmore, Oklahoma
March 24, 1994
<PAGE> 3
NOBLE AFFILIATES, INC.
110 WEST BROADWAY
ARDMORE, OKLAHOMA 73401
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 1994
INTRODUCTION
The accompanying proxy, mailed together with this proxy statement, is
solicited by and on behalf of the Board of Directors of the Company for use at
the annual meeting of shareholders of the Company to be held on April 26, 1994,
and at any adjournment thereof. The approximate date on which this proxy
statement and the accompanying proxy were first sent to shareholders of the
Company is March 24, 1994.
Shares represented by valid proxies will be voted at the meeting in
accordance with the directions given. If no direction is indicated, the shares
will be voted for election of the nominees for director named in the proxy.
Any shareholder of the Company returning a proxy has the right to revoke the
proxy at any time before it is voted by communicating such revocation in
writing to Orville Walraven, Secretary, Noble Affiliates, Inc., P.O. Box 1967,
Ardmore, Oklahoma 73402, or by executing and delivering a proxy bearing a later
date. No revocation by written notice or by delivery of another proxy shall be
effective until such notice of revocation or other proxy, as the case may be,
has been received by the Company at or prior to the meeting.
In order for a shareholder proposal to be considered properly brought
before the annual meeting of shareholders, the By-laws of the Company require
that the Secretary of the Company receive written notice from a shareholder not
later than 60 days prior to the annual meeting if such meeting is to be held on
a day within 30 days preceding the anniversary of the previous year's annual
meeting, or 90 days in advance of such meeting if it is to be held on or after
the anniversary of the previous year's annual meeting. The notice must specify
certain information concerning such shareholder and the proposed business to be
brought before the meeting. Accordingly, a shareholder's proposal to be
presented at the 1995 annual meeting of shareholders must be received by the
Company no later than February 24, 1995. For additional information concerning
the By-law provision relating to advance notice of shareholder proposals,
please contact the Secretary of the Company at (405) 223-4110 or by mail at the
address of the Company designated above.
VOTING PROCEDURES AND TABULATION
The Company will appoint one or more inspectors of election to act at the
meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner and
according to the best of their ability. The inspectors will ascertain the
number of shares outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of proxies and ballots, count all
votes and ballots, and perform certain other duties as required by law.
The inspectors will tabulate the number of votes cast for or withheld as
to the vote on each nominee for director. Under Delaware law and the
Certificate of Incorporation and By-laws of the Company, an abstention (which
is not an option in the election of directors) or broker non-vote (or other
limited proxy) will have no effect on the election of directors, provided a
quorum is present.
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<PAGE> 4
VOTING SECURITIES
Only holders of record of common stock of the Company, par value
$3.33-1/3 per share ("Common Stock"), at the close of business on March 14,
1994, the record date for the meeting, are entitled to notice of and to vote at
the meeting. The presence of a majority of the outstanding shares of Common
Stock is necessary to constitute a quorum. On the record date for the meeting,
there were issued and outstanding 49,943,530 shares of Common Stock. Each
share of Common Stock is entitled to one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tabulation sets forth as of December 31, 1993 information
with respect to the only persons who were known to the Company to be beneficial
owners of more than five percent of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OF CLASS
- ------------------- ---------------------- --------
<S> <C> <C>
FMR Corp. 7,347,590(2) 14.7%
82 Devonshire Street
Boston, Massachusetts 02109
The Samuel Roberts Noble Foundation, Inc. 6,758,853(3) 13.5%
P. O. Box 2180
Ardmore, Oklahoma 73402
Tiger Management Corporation 2,739,900(4) 5.5%
101 Park Avenue
New York, New York 10178
</TABLE>
_____________________________
(1) Unless otherwise indicated, all shares listed are directly held with sole
voting and investment power.
(2) According to an Amendment No. 3 to Schedule 13G filed by FMR Corp., a
Massachusetts corporation, with the Securities and Exchange Commission
on February 14, 1994, FMR Corp. beneficially owns all the shares with
sole dispositive power but has sole voting power with respect to only
28,898 of the shares. FMR Corp. indicated in its amended Schedule 13G
that it is a parent holding company that owns the shares indirectly
through two of its wholly-owned subsidiaries. According to the amended
Schedule 13G, one subsidiary beneficially owns 7,303,430 of the shares
as a result of its acting as an investment adviser to several investment
companies and one subsidiary beneficially owns 44,160 shares as a result
of serving as an investment manager of several institutional accounts.
(3) Beneficial ownership of such shares was reported in an Amendment No. 3 to
Schedule 13G filed by The Samuel Roberts Noble Foundation, Inc. with
respect to its beneficial ownership of the Company's Common Stock.
(4) Beneficial ownership of such shares was reported in a Schedule 13G filed
by Tiger Management Corporation ("Tiger") with respect to its beneficial
ownership of the Company's Common Stock. In its Schedule 13G, Tiger also
reported that its majority shareholder, Julian H. Robertson, is also the
chairman, director and controlling shareholder of Panther Management
Corporation which is the sole general partner of Panther Management
Company, L.P. ("PMCLP"), an investment adviser registered under the
Investment Advisers Act of 1940. According to the Schedule 13G, PMCLP
beneficially owns, and has sole voting and dispositive powers over,
198,700 shares of the Company's Common Stock as a result of its acting as
an investment adviser to a certain investment company.
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<PAGE> 5
The Samuel Roberts Noble Foundation, Inc. (the "Foundation") is an
Oklahoma not-for-profit corporation organized in 1952 as successor to a
charitable trust formed in 1945. The Foundation is engaged in basic plant
biology research and agricultural research, consultation and demonstration.
From time to time as funds are available, the Foundation also makes grants to
various charitable organizations. The Foundation organized the Company in
1969. John F. Snodgrass, a director of the Company, serves on the Board of
Trustees of the Foundation. Mr. Snodgrass is also President Emeritus of the
Foundation. In the event of a vacancy in a trusteeship of the Foundation, a
majority of the remaining trustees has the power to elect a successor trustee
to fill the vacancy.
ELECTION OF DIRECTORS
Eight directors, constituting the entire Board of Directors, are to be
elected at the meeting to serve until the next annual meeting of shareholders
and until their successors have been elected and qualified. All nominees for
director were elected directors of the Company by vote of the shareholders at
the 1993 annual meeting with the exception of Mr. James C. Day who was elected
as director of the Company by the directors in January 1994. Generally, the
Company's By-laws provide that a shareholder must deliver written notice to the
Secretary of the Company not later than 90 days prior to the annual meeting
naming such shareholder's nominee(s) for director and specifying certain
information concerning such shareholder and nominee(s). Accordingly, a
shareholder's nominee(s) for director to be presented at the 1995 annual
meeting of shareholders must be received by the Company no later than January
25, 1995.
Directors are elected by plurality vote. All duly submitted and
unrevoked proxies in the form accompanying this proxy statement will be voted
for the nominees selected by the Board of Directors, except where authorization
so to vote is withheld. THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF SUCH NOMINEES.
DIRECTORS / NOMINEES FOR DIRECTOR
ROY BUTLER -- Mr. Butler retired as President and Chief Executive Officer of
the Company effective 1984 and is currently a private investor. Mr. Butler,
age 68, had served as President of the Company since 1975 and as its Chief
Executive Officer since 1980. He has served as a director of the Company since
1973.
EDWARD F. COX -- Mr. Cox has been a partner in the law firm of Donovan Leisure
Newton & Irvine, New York, New York for more than five years. Mr. Cox, age 47,
has served as a director of the Company since 1984.
JAMES C. DAY -- Mr. Day, age 50, has served as President and Chief Executive
Officer of Noble Drilling Corporation since January, 1984, and as Chairman of
the Board of Noble Drilling Corporation since October, 1992. Prior thereto,
Mr. Day served as Vice President of Noble Drilling Corporation from January,
1983. Prior to 1983, Mr. Day served as Vice President and Assistant Secretary
of the Company. Mr. Day is also a director of Global Industries, Ltd.
ROBERT KELLEY -- Mr. Kelley has served as President and Chief Executive Officer
of the Company since August 1986, and as Chairman of the Board since October
1992. Prior thereto, he had served as Executive Vice President of the Company
since January 1986. Mr. Kelley, age 48, also serves as President and Chief
Executive Officer of Samedan Oil Corporation ("Samedan"), a wholly-owned
subsidiary of the Company, and he has held such positions since 1984. For more
than five years prior thereto, Mr. Kelley served as an officer of Samedan. Mr.
Kelley also serves as a director of Security Corporation of Duncan, Oklahoma
and Exchange National Bank and Trust Company of Ardmore, Oklahoma. He has
served as director of the Company since 1986.
HAROLD F. KLEINMAN -- Mr. Kleinman has been a senior member of the law firm of
Thompson & Knight, a Professional Corporation, Dallas, Texas, counsel for the
Company, for more than five years and is currently a shareholder of such firm.
Mr. Kleinman, age 63, has served as director of the Company since 1985.
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<PAGE> 6
GEORGE J. MCLEOD -- Mr. McLeod currently serves as President and Chief
Executive Officer of Geolock Resources Ltd., a company engaged in oil and gas
exploration and production in Canada. Mr. McLeod, age 65, retired as President
and Chief Executive Officer of the Company in 1986, after serving in such
positions since 1984. For more than five years prior thereto, Mr. McLeod
served as President of Samedan. Mr. McLeod also currently serves as a director
of Noble Drilling International Ltd., a wholly-owned subsidiary of Noble
Drilling Corporation, and of Crestar Energy in Calgary, Alberta. He has served
as director of the Company since 1977.
GUY W. NICHOLS -- Mr. Nichols has served as Chairman of the Board of Woods Hole
Oceanographic Institution since 1985. Prior to 1984, Mr. Nichols was Chairman
and Chief Executive Officer of New England Electric System. Mr. Nichols, age
68, also serves as a director of Nashua Corporation, State Mutual Life
Assurance Company of America and Allmerica Property & Casualty Companies, Inc.
Mr. Nichols has served as a director of the Company since 1986.
JOHN F. SNODGRASS -- Mr. Snodgrass currently serves as a trustee of the
Foundation and has served in such position since 1982. Mr. Snodgrass is also
currently President Emeritus of the Foundation. He retired as President and
Chief Executive Officer of the Foundation effective January 31, 1992, after
serving in such positions since 1982. Prior thereto, Mr. Snodgrass was
President and Chief Executive Officer of Exchange National Bank and Trust
Company of Ardmore, Oklahoma, and until 1984, Mr. Snodgrass was Chairman of the
Board of the bank. Mr. Snodgrass, age 68, also serves as a director of Noble
Drilling Corporation, Oklahoma Gas and Electric Company, Exchange National Bank
and Trust Company of Ardmore, Oklahoma, and Centaur Pharmaceuticals, Inc. of
Sunnyvale, California. He has served as a director of the Company since 1978.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors held nine meetings in 1993. Each nominee for
director attended every meeting of the Board and every meeting of the Board
committees on which he served, except that one director was absent from one
Board meeting.
COMMITTEES OF THE BOARD
The Company does not have a standing nominating committee or any other
committee that performs a similar function. The committees of the Board, the
current members and the primary functions of the committees are as follows:
COMPENSATION AND BENEFITS COMMITTEE -- Roy Butler, Chairman; George J.
McLeod; and John F. Snodgrass. The primary responsibilities of the
compensation committee are to fix annual salaries and bonuses of the
officers of the Company, including those officers who are also directors,
and to administer the Company's employee stock option plans. The
compensation committee held five meetings during 1993.
AUDIT COMMITTEE -- John F. Snodgrass, Chairman; Edward F. Cox; Harold F.
Kleinman; and Guy W. Nichols. The primary responsibilities of the audit
committee are to review with the Company's auditors the audit procedures
to be applied in the conduct of the annual audit and the results of the
annual audit. During 1993 the audit committee held three meetings.
EXECUTIVE COMMITTEE -- Robert Kelley, Chairman; Roy Butler; Harold F.
Kleinman; and John F. Snodgrass. The primary responsibilities of the
executive committee are to exercise the authority of the Board during the
intervals between meetings of the Board. During 1993 the executive
committee held one meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The current
members of the compensation committee identified above were the only persons
who served on such committee during 1993. Mr. Butler and
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<PAGE> 7
Mr. McLeod were formerly officers of the Company. See "Election of Directors"
in this proxy statement for a description of the prior business experience and
principal employment of Messrs. Butler and McLeod.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company or any of its subsidiaries
receive an annual retainer of $20,000 and a fee of $1,000 for each Board or
committee meeting attended. Each director who is such an officer receives a
fee of $100 for each Board meeting attended. The chairman of each committee
receives an additional annual retainer of $2,500. The Company also reimburses
directors for travel, lodging and related expenses they incur in attending
Board and committee meetings.
STOCK OPTION PLAN. The 1988 Nonqualified Stock Option Plan for
Non-Employee Directors provides for the grant of nonqualified stock options to
each director of the Company who is not also either an employee or officer of
the Company and who has not made an irrevocable, one- time election to decline
to participate in the plan. Harold F. Kleinman has elected not to participate
in the plan. The plan was adopted by the Board of Directors in 1988 and
approved by shareholders at the 1989 annual meeting. The plan as originally
adopted provided for the grant of nonqualified stock options and SARs but was
amended during 1993 to eliminate the granting of SARs. An aggregate of 250,000
shares of Common Stock has been reserved for issuance under the plan. The plan
provides generally for a formula grant of options annually on each July 1
during the term of the plan. The formula results in the automatic grant
(unless revoked by the Board in a particular year) to each participating non-
employee director of an option to purchase a number of shares of Common Stock
equal to 30,000 divided by the number of participating non- employee directors.
The purchase price per share of Common Stock under the option is the fair
market value of the share on the grant date of such option.
As of July 1, 1993, each of Messrs. Butler, Cox, McLeod, Nichols and
Snodgrass was granted an option under the plan covering 6,000 shares of Common
Stock at the average per share exercise price of $24.625. The period within
which a non-employee director's option may be exercised commences at the close
of such director's first year of service as a director after the grant date of
such option and ends ten years after such grant date, unless expiring sooner
due to termination of service or death, or unless such option is fully
exercised prior to the end of such ten-year period.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The tabulation below sets forth as of December 31, 1993, beneficial
ownership of shares of Common Stock by the eight nominees for director and each
named executive officer listed in the Summary Compensation Table included
elsewhere in this proxy statement. The tabulation also sets forth the number
of shares of Common Stock beneficially owned as of that date by all directors
and executive officers of the Company as a group.
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<PAGE> 8
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED(1)
-------------------------------------------
NUMBER PERCENT OF
NAME OF SHARES CLASS(2)
- ---- --------- ----------
<S> <C> <C>
Director
Roy Butler . . . . . . . . . . . . . . . . . . . . . . . . 26,377 (3) --
Edward F. Cox . . . . . . . . . . . . . . . . . . . . . . . 23,000 (4) --
James C. Day . . . . . . . . . . . . . . . . . . . . . . . 18 --
Robert Kelley . . . . . . . . . . . . . . . . . . . . . . . 54,051 (5) .1%
Harold F. Kleinman . . . . . . . . . . . . . . . . . . . . 200 (6) --
George J. McLeod . . . . . . . . . . . . . . . . . . . . . 25,021 (7) --
Guy W. Nichols . . . . . . . . . . . . . . . . . . . . . . 26,000 (8) --
John F. Snodgrass . . . . . . . . . . . . . . . . . . . . . 6,783,708 (9)(10) 13.6%
Named Executive Officers (excluding
any director named above) and Group
William D. Dickson . . . . . . . . . . . . . . . . . . . . 34,397 (11) --
Boyce Perry . . . . . . . . . . . . . . . . . . . . . . . . 19,924 (12) --
W. A. Poillion . . . . . . . . . . . . . . . . . . . . . . 38,414 (13) --
James C. Woodson . . . . . . . . . . . . . . . . . . . . . 53,021 (14) .1%
All directors and executive
officers as a group (13 persons) . . . . . . . . . . . . 7,120,317 (15) 14.3%
</TABLE>
___________________________________
(1) Unless otherwise indicated, all shares are directly held with sole voting
and investment power.
(2) Less than one-tenth of one percent unless otherwise indicated.
(3) Includes 15,000 shares not outstanding but subject to currently
exercisable options.
(4) Includes 22,000 shares not outstanding but subject to currently
exercisable options.
(5) Includes 52,666 shares not outstanding but subject to currently
exercisable options.
(6) Consists of 200 shares held as joint tenant with Mr. Kleinman's spouse.
(7) Includes 15,000 shares not outstanding but subject to currently
exercisable options.
(8) Includes 21,000 shares not outstanding but subject to currently
exercisable options.
(9) Includes 6,758,853 shares held of record by the Foundation. Under the
rules and regulations of the Securities and Exchange Commission, such
shares are required to be included in the foregoing table as
"beneficially owned" because Mr. Snodgrass possesses shared voting and
investment power with respect thereto as one of nine trustees of the
Foundation. As with other corporate action, the voting of the shares
held by the Foundation requires a majority vote of its trustees at a
meeting at which a quorum of trustees is present. Accordingly, Mr.
Snodgrass does not represent sufficient voting power on the Foundation's
board of trustees to determine voting or investment decisions with
respect to the 6,758,853 shares. Mr. Snodgrass disclaims any pecuniary
interest in the 6,758,853 shares.
(10) Includes 460 shares held as joint tenant with Mr. Snodgrass' spouse.
Also includes 20,000 shares not outstanding but subject to currently
exercisable options.
(11) Includes 34,138 shares not outstanding but subject to currently
exercisable options.
(12) Includes 15,000 shares not outstanding but subject to currently
exercisable options.
(13) Includes 33,437 shares not outstanding but subject to currently
exercisable options.
(14) Includes 47,774 shares not outstanding but subject to currently
exercisable options.
(15) Includes 310,672 shares not outstanding but subject to currently
exercisable options and 6,758,853 shares held of record by the
Foundation, as to which Mr. Snodgrass possesses shared voting and
investment power as a trustee of the Foundation and in which he disclaims
any pecuniary interest.
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<PAGE> 9
EXECUTIVE COMPENSATION
The following report of the compensation and benefits committee of the
Board of Directors and the information herein under "Performance Graph" shall
not be deemed to be "soliciting material" or to be "filed" with the Securities
and Exchange Commission ("SEC") or subject to the SEC's proxy rules, except for
the required disclosure herein, or to the liabilities of Section 18 of the
Securities Exchange Act of 1934 (the "Exchange Act"), and such information
shall not be deemed to be incorporated by reference into any filing made by the
Company under the Securities Act of 1933 or the Exchange Act.
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE ON EXECUTIVE COMPENSATION
To the Shareholders
of Noble Affiliates, Inc.:
As members of the compensation and benefits committee (the "Committee")
of the Board of Directors, we have responsibility for administering the
executive compensation program of the Company. All decisions by the Committee
relating to the compensation of executive officers are reviewed by the full
Board, except for decisions about grants or awards under the 1992 Stock Option
and Restricted Stock Plan of the Company, which must be made solely by the
Committee in order to satisfy the condition of disinterested administration of
such plan under the applicable Federal securities laws and regulations.
COMPENSATION POLICIES
The executive compensation policy of the Company, which is endorsed by
the Committee, is to provide a compensation program that will attract,
motivate, and retain persons of high quality and will support a long-standing
internal culture of loyalty and dedication to the interests of the Company. In
administering the executive compensation program, the Committee is mindful of
the following principles and guidelines which are supported by the full Board.
Base salaries for executive officers should be competitive. A sufficient
portion of annual compensation should be at risk in order to align the
interests of executives with those of shareholders of the Company. This
variable part of annual compensation should reflect both corporate and
individual performance. As a person's level of responsibility increases, a
greater portion of total compensation should be at risk and the mix of total
compensation should be weighted more heavily in favor of stock-based
compensation. The Committee has not established objective, arbitrary
percentages of the mix of total compensation that should be fixed versus at
risk for any executive officers of the Company. Stock options provide
executives long-term incentive and are beneficial in aligning the interests of
executives and shareholders in the enhancement of shareholder value.
COMPENSATION PROGRAM FOR 1993
For 1993, the executive compensation program consisted of three principal
elements, which are discussed below: base salary, an annual incentive bonus
plan, and stock options that are exercisable over a ten-year period.
BASE SALARY: Base salary for executive officer positions is
determined principally by competitive factors. The Company obtains
information through participation in oil and gas industry compensation
surveys which are conducted by independent compensation consultants,
including William M. Mercer,
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<PAGE> 10
Incorporated ("Mercer") and KPMG Peat Marwick, and others. One such
survey includes information on an industry group called the Energy 27
Group comprised of corporations in the same industry as the Company.
Twelve of the 16 companies included in the Dow Jones Total Return Index
for Secondary Oil Companies referenced in the performance graph contained
herein are included in the Energy 27 Group. The Committee analyzes the
information and makes annual adjustments effective January 1st based on
performance, incumbent length of service in the executive position and
cost of living. The policy of the Committee generally is to establish
base salary levels that approximate survey averages, and as such, the
salary levels for 1993 were within five percent, plus or minus, of the
applicable average.
ANNUAL INCENTIVE BONUS PLAN: The annual incentive bonus plan in
which executive officers participate is available to all full time
employees of the Company or its subsidiaries (except those geologists
employed by the Company who choose to be covered by the geological
incentive plan) who have completed one year of service at the close of
the plan year (December 31). The target bonus for an employee is the
base salary at year end of such employee multiplied times the percentage
factor assigned to such employee's salary classification. Target
percentage factors range from 5 to 25 percent, with factors of 25 percent
for the CEO and operating committee members of Samedan Oil Corporation
("Samedan"), the principal operating subsidiary of the Company, and 20
percent for the other executive officers. An aggregate pre-adjustment
bonus pool is determined for each division and department.
Annual performance goals for the Company and its divisions are
weighted with respect to four criteria as follows: cost of finding and
developing new reserves (40 percent), new reserves added (40 percent),
cash flow from operations (20 percent for division; 10 percent for
Company) and consolidated net income (10 percent for Company). The
annual performance goals for cost of finding and developing new reserves,
new reserves added, and cash flow from operations are established based
upon financial budgets and forecasts approved initially by the operating
committee of Samedan at the beginning of each year and then reviewed and
finally approved by the full Board. Annual performance goals are subject
to revision, in the discretion of the full Board in the event of changed
conditions since December of the preceding goal year, provided any such
revision is made no later than the date of the Board of Directors meeting
regularly held the day preceding the Company's annual meeting of
shareholders in the plan year. For 1993, the Board adjusted the annual
performance goals for new reserves added by 3%, cash flow from operations
by 3% and consolidated net income by 1%. Such changes reflected minor
adjustments to volume and price forecasts as well as minor adjustments to
the Company's estimates of exploratory and capital expenditures for 1993
and no significant changes in conditions occurred from the time of the
construction of the original budget in December 1992, to approval of the
revised budget in April 1993.
Each goal weighting percentage is subject to adjustment within a
range of zero for achievement of less than 75 percent of the goal to 200
percent for achievement of greater than 135 percent of the goal. The
combined, weighted goal achievement is then determined within a range of
zero for achievement of less than 65 percent of the goal to 200 percent
for achievement of more than 160 percent of the goal. The target bonus
for employees of divisions is also adjusted to reflect the combined
percentage of achievement of all assigned goals using the ratio of 75
percent for division goal achievement and 25 percent for Company goal
achievement. The bonus amount is then determined by multiplying the
target bonus times the applicable multiplier. Using these percentages,
the bonus received by an executive officer will not exceed 50 percent of
his salary.
1992 STOCK OPTION AND RESTRICTED STOCK PLAN (THE "OPTION PLAN"):
The Option Plan is designed to align a significant portion of the
executive compensation program with shareholder interests. The Option
Plan, which was approved by shareholders in 1992, permits the use of
several different types of stock-based grants or awards: nonqualified,
incentive, or discount stock options (with or without stock appreciation
rights) and restricted stock. To date only nonqualified stock options
have been granted under the Option Plan. (Certain of the nonqualified
stock options which were granted in 1992 included tandem stock
appreciation rights which were subsequently rescinded during 1993.)
-8-
<PAGE> 11
The options represent the right to purchase shares of Common Stock
over a ten-year period at the fair market value per share as of the date
the option is granted. The options vest at the rate of one-third per
year commencing on the first anniversary of the grant date.
During 1991, the Company engaged Mercer to advise the Committee as
to appropriate grant guidelines. Mercer based its recommendations as to
appropriate grant guidelines on an analysis of average annual stock
grants over a three-year period as disclosed in publicly available proxy
statements of 16 companies it considered comparable to the Company in
business and scope. The recommendation of Mercer ranged from 0.3 to 0.5
at the lower levels of employees, from 1.2 to 2.1 for vice presidents and
from 1.5 to 2.6 at the CEO level. On the basis of the recommendation of
Mercer, the Committee in 1991 adopted grant multiples that ranged from
0.3 to 2.0, which fell approximately in the middle of the Mercer
recommended range, with multiples of 2.0 for the CEO and 1.5 for other
executive officers. The Committee has not undertaken since 1991 to
formally reassess the adopted grant multiples. Four of the companies
included in Mercer's analysis are four of the 16 companies included in
the Dow Jones Total Return Index for Secondary Oil Companies referenced
in the performance graph contained herein.
The number of shares granted is determined by dividing (i) the sum
of the optionee's annual base salary plus target bonus multiplied times
the applicable grant multiple by (ii) the fair market value per share of
the underlying Common Stock on the calculation date. The Committee, in
its discretion, can adjust the number of shares granted under this plan
from the number determined under the grant guidelines. Options granted
to executive officers in 1993 were based on the guidelines described
above using a fair market value on grant date of $24.875.
1993 COMPENSATION OF CEO
The 1993 salary of Mr. Kelley was determined in January 1993 as a
function of performance and competitive factors at that time. Mr. Kelley's
1993 salary was increased five percent over his 1992 salary, reflecting
consideration of competitive data provided by Mercer and the assessment by the
Committee and the Board of the Company's 1992 results of operations under Mr.
Kelley's leadership. As a result, Mr. Kelley's 1993 salary fell within the
range discussed above in the last sentence under "Compensation Program for 1993
- -Base Salary" in this report.
In determining the amount of bonus paid to Mr. Kelley for 1993, the
Committee applied the performance goals' criteria discussed above under "Annual
Incentive Bonus Plan" which resulted in an applicable multiplier under the plan
of 1.2. This factor of 1.2 multiplied times the target bonus for Mr. Kelley
produced a calculated bonus of $94,500.
In 1993, the Committee granted Mr. Kelley an option to purchase 31,875
shares of Common Stock pursuant to the Option Plan. In granting this option,
the Committee used a grant multiplier of 2.0 (see "1992 Stock Option and
Restricted Stock Plan" above), which took into account Mr. Kelley's level of
responsibility and was based on the recommendation of Mercer.
PARTICIPATION IN MINERAL, ROYALTY AND OVERRIDING ROYALTY ACQUISITIONS
In addition to the executive compensation policies and programs described
above, the Company has a long-standing policy pursuant to which directors,
officers and key employees of the Company and Samedan are permitted to acquire
interests in minerals, royalties, and overriding royalties purchased from time
to time by Samedan (or its subsidiaries). When this participation is offered,
usually up to one-half of the interests acquired by Samedan (or its
subsidiaries) is made available to be acquired by the participants in the
aggregate. A participant is required to purchase his or her interest for cash
on the same cost basis as Samedan and is responsible for obtaining any required
financing. In certain instances, the Company or Samedan has assisted
participants in obtaining financing from a third party lender and/or provided a
guarantee of the amount financed by a participant. This policy applies only
with respect to mineral, royalty, and overriding royalty interests acquired by
Samedan (or its subsidiaries) and does not apply to the acquisition of working
interests,
-9-
<PAGE> 12
even though a group of oil and gas properties acquired by Samedan (or its
subsidiaries) includes both working interests and mineral, royalty, and
overriding royalty interests.
The policy was initiated to serve as an incentive for employees in
connection with the acquisition of oil and gas properties by Samedan and for
directors to continue in the service of the Company. The Board of Directors of
the Company believes the policy to be in the best interests of the Company and
its shareholders and, because the participant purchases the interest for fair
value and shares the same risk as Samedan, does not consider the operation of
the policy to be compensatory in nature. The Committee has responsibility for
administering the policy.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 contains provisions which
limit the tax deductibility of executive compensation in excess of $1 million
per year, subject to certain exceptions. The policy of the Company is to
design its compensation programs to preserve the tax deductibility of
compensation paid to its executive officers and other members of management.
However, the Committee could in the future determine, taking into consideration
the relevant factors then in existence, to make awards or approve compensation
that does not qualify for a compensation deduction for tax purposes, if the
Committee believes it is in the Company's interest to do so.
SUMMARY
The Committee believes that linking executive compensation to corporate
performance results in a better alignment of compensation with corporate goals
and shareholder interests. As performance goals are met or exceeded, resulting
in increased value to shareholders, executive officers are rewarded
commensurately. The Committee believes that compensation levels during 1993
adequately reflect the compensation goals and policies of the Company.
March 24, 1994 Roy Butler, Chairman
George J. McLeod
John F. Snodgrass
-10-
<PAGE> 13
The following table sets forth certain summary information concerning the
compensation awarded to, earned by, or paid to the Chief Executive Officer of
the Company and each of the four most highly compensated executive officers of
the Company other than the Chief Executive Officer (collectively, the "named
executive officers") for the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------------- ------------
Other
Annual Stock All Other
Name and Compen- options Compen-
Principal sation (number of sation
Position Year Salary ($) Bonus ($) ($)(1) shares)(2) ($)(1)
-------- ---- ---------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert Kelley, Chief 1993 315,000 94,500 2,739 31,875 8,994(3)
Executive Officer 1992 300,000 115,000 1,992 44,000 8,728
1991 255,000 76,500 12,000
James C. Woodson, Vice 1993 180,000 54,000 1,932 13,662 9,916(4)
President - Exploration and 1992 173,400 52,020 1,961 20,322 9,605
Operating Committee member of 1991 165,200 49,560 12,000
Samedan
W.A. Poillion, Vice President 1993 149,750 44,924 1,943 11,367 8,976(3)
- Production and Drilling and 1992 141,750 42,526 1,900 16,611 8,284
Operating Committee member of 1991 135,000 40,500 9,000
Samedan
William D. Dickson, Vice 1993 142,000 44,080 1,974 10,347 6,097(5)
President - Finance and 1992 137,000 57,880 1,914 15,414 5,762
Treasurer 1991 130,500 31,320 9,000
Boyce Perry, Vice 1993 129,800 38,940 1,979 9,852 10,120(6)
President - Marketing and 1992 124,800 62,440 1,900 14,625 9,691
Operating Committee 1991 120,000 36,000 9,000
member of Samedan
</TABLE>
___________________________________
(1) In accordance with the specific SEC transition provisions applicable to
the Other Annual Compensation and All Other Compensation columns,
information for 1991 is not presented.
(2) Options represent the right to purchase shares of Common Stock at a fixed
price per share.
(3) Consists of Company contribution to defined contribution plan.
(4) Consists of Company contribution to defined contribution plan of $8,994
and term life insurance premiums of $922.
(5) Consists of Company contribution to defined contribution plan of $5,964
and term life insurance premiums of $133.
(6) Consists of Company contribution to defined contribution plan of $7,800
and term life insurance premiums of $2,320.
-11-
<PAGE> 14
The following table sets forth certain information with respect to
options to purchase Common Stock granted during the year ended December 31,
1993 to each of the named executive officers.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of
Stock Price
Appreciation
Individual Grants for Option Term
- ------------------------------------------------------------------------------------- ----------------------
Options % of Total
Granted Options Exercise
(number of Granted to or Base
shares) Employees Price Expiration
Name (1) in 1993 ($/sh) Date 5%($)(2) 10%($)(3)
---- --------- ---------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert Kelley . . . . 31,875 13.2% $24.875 7/26/03 498,684 1,263,684
James C. Woodson 13,662 5.7% $24.875 7/26/03 213,742 541,630
W.A. Poillion . . . . 11,367 4.7% $24.875 7/26/03 177,837 450,645
William D. Dickson . 10,347 4.3% $24.875 7/26/03 161,879 410,207
Boyce Perry . . . . . 9,852 4.1% $24.875 7/26/03 154,134 390,582
</TABLE>
___________________________________
(1) Options represent the right to purchase shares of Common Stock at a fixed
price per share. The options vest at the rate of 33 1/3 percent per year
commencing on the first anniversary of the grant date. See footnote 2 to
the Summary Compensation Table included elsewhere herein for additional
information on options.
(2) Represents an assumed market price per share of Common Stock of $40.52.
(3) Represents an assumed market price per share of Common Stock of $64.52.
-12-
<PAGE> 15
The following table sets forth certain information with respect to the
exercise of options to purchase Common Stock during the year ended December 31,
1993, and the unexercised options held at December 31, 1993 and the value
thereof, by each of the named executive officers.
AGGREGATED OPTION EXERCISES IN 1993
AND 12/31/93 OPTION VALUES
<TABLE>
<CAPTION>
Number of
Unexercised Value of
Options at Unexercised
December 31, In-the-Money
1993 (number Options at
of shares) December 31, 1993($)
-------------------------- ---------------------------
Shares
Acquired Value
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert Kelley . . . . . - - 52,666 65,209 591,910 385,137
James C. Woodson . . . 20,184 260,767 47,774 31,210 580,075 203,600
W.A. Poillion . . . . . - - 33,437 25,441 427,807 163,309
William D. Dickson . . 8,800 114,025 34,138 23,623 409,578 153,970
Boyce Perry . . . . . . 10,875 114,187 15,000 22,602 220,500 148,104
</TABLE>
-13-
<PAGE> 16
DEFINED BENEFIT PLAN
The following table illustrates the estimated annual retirement benefits
payable upon retirement (including amounts attributable to the non-qualified
excess benefit plan) to a person age 65 in specified average salary and years
of service classifications. The estimates assume that benefits are received in
the form of a ten-year certain and life annuity.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Estimated Annual Benefits Upon Retirement at Age 65
After Completion of the Following Years of Service
60 Month Average ---------------------------------------------------------------------
Annual Compensation 15 20 25 30 35
------------------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
$100,000 . . . . . . $24,660 $40,000 $41,101 $49,321 $49,321
150,000 . . . . . . 37,785 60,000 62,976 75,571 75,571
200,000 . . . . . . 50,911 80,000 84,851 101,821 101,821
250,000 . . . . . . 64,036 100,000 106,726 128,071 128,071
300,000 . . . . . . 77,161 120,000 128,601 154,321 154,321
350,000 . . . . . . 90,285 140,000 150,475 180,571 180,571
400,000 . . . . . . 103,410 160,000 172,351 206,821 206,821
450,000 . . . . . . 116,535 180,000 194,326 233,071 233,071
</TABLE>
The Company's defined benefit plan covers substantially all full-time
employees. Contributions are made only by the Company and its subsidiaries and
are actuarially determined to fund estimated benefit requirements. Upon
vesting, the amount of retirement benefit depends on an employee's final
average monthly compensation, age and the number of years of credited service
(maximum of 30 years). The amount of retirement benefit is not subject to any
deductions for social security or any other offset amounts.
Final average monthly compensation is defined in the retirement plan
generally to mean the participant's average monthly rate of compensation from
the Company for the 60 consecutive months prior to retirement which give the
highest average monthly rate of compensation for the participant. Compensation
is defined (with certain exceptions) to mean the compensation actually paid to
a participant as reported on the participant's federal income tax withholding
statement for the applicable calendar year. Compensation covered by the
defined benefit plan includes a participant's Salary, Bonus and $100 of Other
Annual Compensation reported in the Summary Compensation Table included
elsewhere herein. However, no compensation paid to a participant in excess of
$150,000 in 1994 will be considered "compensation" for purposes of the
retirement plan. Therefore, all of the Company's executive officers' current
compensation covered by the plan is limited to $150,000.
As of December 31, 1993, the named executive officers had the
following approximate number of years of credited service for retirement
purposes: Mr. Kelley--18; Mr. Woodson--19; Mr. Poillion--17; Mr. Dickson--15;
and Mr. Perry--28.
-14-
<PAGE> 17
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return
for the Common Stock, the S&P 500 Index and the Dow Jones Total Return Index
for Secondary Oil Companies for the years indicated as prescribed by the SEC's
rules.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG NOBLE AFFILIATES, INC., S&P 500 INDEX
AND DOW JONES TOTAL RETURN INDEX FOR
SECONDARY OIL COMPANIES (2)
(GRAPH)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Company 100 137 117 114 149 225
S&P 500 Index 100 132 128 166 179 197
Dow Jones Total Return Index for Secondary 100 136 113 111 112 124
Oil Companies(3)
</TABLE>
(1) Total return assuming reinvestment of dividends. Assumes $100
invested on January 1, 1989 in Common Stock, the S&P 500 Index and the
Dow Jones Total Return Index for Secondary Oil Companies.
(2) Fiscal year ending December 31.
(footnotes to table continued on following page)
-15-
<PAGE> 18
(3) Comprised of the following companies: Amerada Hess Corporation,
Anadarko Petroleum Corporation, Ashland Oil, Inc., Burlington
Resources Inc., Kerr McGee Corporation, The Louisiana Land and
Exploration Company, MAPCO Inc., Murphy Oil Corporation, Noble
Affiliates, Inc., Occidental Petroleum Corporation, Oryx Energy
Company, Pennzoil Company, Quaker State Corporation, Santa Fe Energy
Resources, Inc., Union Texas Petroleum Holdings, Inc., and Valero
Energy Corporation.
CERTAIN TRANSACTIONS
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors and officers of
the Company, and persons who own more than 10 percent of the Common Stock, to
file with the SEC initial reports of ownership and reports of changes in
ownership of the Common Stock. Directors, officers and more than 10 percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Under the Section 16(a) rules as they
apply to trustees, the trustees of the Foundation are themselves deemed to be
more than 10 percent beneficial owners of the Company because such trustees
possess shared voting and investment power with respect to the securities of
the Company held by the Foundation.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1993, all Section
16(a) filing requirements applicable to its directors, officers and more than
10 percent beneficial owners were complied with, with the exception of the
following: Ann Noble Brown and Mary Jane Noble, trustees of the Foundation, did
not file a Form 5 for the year ended December 31, 1993 and have not furnished
the Company with confirmation indicating that no such Form 5 was due; and Rusty
Noble, a trustee of the Foundation, has not filed an initial statement of
beneficial ownership on Form 3 or a Form 5 for the year ended December 31,
1993.
INDEPENDENT ACCOUNTANTS
The appointment of the accounting firm selected to audit the Company's
financial statements is subject to ratification by the Board of Directors and
will not be submitted to shareholders for ratification or approval. Arthur
Andersen & Co., which has audited the Company's financial statements since
1989, has been appointed by the Board of Directors to audit the financial
statements of the Company for 1994. Representatives of Arthur Andersen & Co.
are expected to be present at the meeting to respond to appropriate questions
from shareholders and will be given the opportunity to make a statement at the
meeting should they desire to do so.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
Shareholder proposals intended to be included in the Company's proxy
statement relating to the 1995 annual meeting of shareholders, which is
currently scheduled to be held on April 25, 1995, must be received by the
Company at its office in Ardmore, Oklahoma, addressed to the Secretary of the
Company, no later than November 24, 1994.
The cost of solicitation of proxies will be borne by the Company.
Solicitation may be made by mail, personal interview, telephone or telegraph by
officers and regular employees of the Company, who will receive no additional
compensation therefor. To aid in the solicitation of proxies, the Company has
employed the firm of Georgeson & Co., Inc., which will receive a fee of
approximately $7,000 plus out-of-pocket expenses. The Company will bear the
reasonable expenses incurred by banks, brokerage firms, custodians, nominees
and fiduciaries in forwarding proxy material to beneficial owners.
-16-
<PAGE> 19
The Board of Directors does not intend to present any other matter at
the meeting and knows of no other matters that will be presented. However, if
any other matter comes before the meeting, the persons named in the enclosed
proxy intend to vote thereon in accordance with their best judgment.
NOBLE AFFILIATES, INC.
WILLIAM D. DICKSON
VICE PRESIDENT-FINANCE AND TREASURER
Ardmore, Oklahoma
March 24, 1994
-17-
<PAGE> 20
<TABLE>
<S> <C>
NOBLE AFFILIATES, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert Kelley and William D. Dickson,
and either of them, proxies with power of substitution in each, and
hereby authorizes them to represent and to vote, as designated below,
all shares of common stock of Noble Affiliates, Inc. standing in the
name of the undersigned on March 14, 1994 at the annual meeting of
shareholders to be held on April 26, 1994 at Ardmore, Oklahoma, and at
any adjournment thereof and especially to vote on the items of
business specified below, as more fully described in the notice of the
meeting dated March 24, 1994, and the proxy statement accompanying the
same, the receipt of which is hereby acknowledged.
1. Election of Directors
FOR ALL NOMINEES WITH EXCEPTIONS NOTED / / WITHHOLD AUTHORITY FOR ALL NOMINEES / /
</TABLE>
Roy Butler, Edward F. Cox, James C. Day, Robert Kelley, Harold F. Kleinman,
George J. McLeod, Guy W. Nichols, John F. Snodgrass
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.
This proxy when duly executed will be voted in the manner directed herein by the
undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such common stock and hereby ratifies and confirms all action
that said proxies, their substitutes, or any of them, might lawfully take in
accordance with the terms hereof.
Dated: , 1994
--------------------------------
--------------------------------
Signature(s) of Shareholder(s)
This proxy should be signed
exactly as your name appears
hereon. Joint owners should both
sign. If signed as attorney,
executor, guardian, or in some
other representative capacity,
or as an officer of a
corporation, please indicate
your capacity or title.
Please complete, date and sign
this proxy and return it in the
enclosed envelope, which
requires no postage if mailed in
the United States.
