PENN VIRGINIA CORPORATION
800 THE BELLEVUE
200 S. BROAD STREET
PHILADELPHIA, PENNSYLVANIA 19102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The annual meeting of the shareholders of Penn Virginia Corporation will
be held in the Boardroom of the Company, 800 The Bellevue, 200 South Broad
Street, Philadelphia, Pennsylvania, on Tuesday, May 3, 1994, at 10:00 a.m.,
Philadelphia Time, to:
1. elect a Board of Directors for the ensuing year; and
2. transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on February 24, 1994
will be entitled to notice of and to vote at the meeting.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON.
Barbara A. Shaw
Corporate Secretary
March 31, 1994
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PENN VIRGINIA CORPORATION
800 THE BELLEVUE
200 S. BROAD STREET
PHILADELPHIA, PENNSYLVANIA 19102
March 31, 1994
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is solicited on behalf of the Board of Directors of
Penn Virginia Corporation ("Company") for use at the annual meeting of
shareholders on May 3, 1994. The proxy may be revoked by a shareholder at any
time before its use. The Company recommends that written notice of any such
revocation be given to the Secretary of the Company. The expense of this
solicitation will be paid by the Company. Some officers and regular employees
may solicit proxies personally and by telephone.
Shareholders of record at the close of business on February 24, 1994 will
be entitled to vote at the meeting. On that date there were outstanding and
entitled to vote (one vote per share) 4,279,540 shares of common stock, par
value $6.25 per share, not including 157,977 shares held by the Company in its
treasury. The presence, in person or by proxy, of shareholders entitled to
cast a majority of votes will be necessary to constitute a quorum for the
transaction of business. Under Virginia Law, Directors are elected by a
plurality of the votes cast by the shares entitled to vote at a meeting at
which a quorum is present. Accordingly, abstentions and broker non-votes will
have no effect on the outcome of the vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Except as set forth in the following table, as of March 31, 1994 no person
known to the Company beneficially owned more than five percent (5%) of the
Company's outstanding common stock:
SHARES BENEFICIALLY PERCENT OF
NAME AND ADDRESS OWNED* CLASS
---------------- ------------------- ----------
E. B. Leisenring, Jr.................... 313,938(1) 7.34%
700 The Bellevue
200 S. Broad Street
Philadelphia, PA 19102
Fidelity Bank, N.A...................... 364,197(2) 8.51%
(a subsidiary of First Fidelity
Bancorporation)
Broad and Walnut Streets
Philadelphia, PA 19109
Interkohle Beteiligungsgesellschaft mbH. 868,258(3) 20.29%
Tresckowstrasse 5
30457 Hannover
Germany
Quest Advisory Corp..................... 403,850(4) 9.44%
1414 Avenue of the Americas
New York, New York 10019
- ---------
* Based on information furnished to the Company by the respective
shareholders, or contained in filings made with the Securities and Exchange
Commission.
(1) Includes 23,000 shares owned by two trusts of which Mr. Leisenring is a
co-trustee and with respect to which he shares voting and investment
power and in which he has a beneficial interest;
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236,966 shares owned by four trusts of which Mr. Leisenring is co-trustee
with Fidelity Bank and with respect to which he shares voting and
investment power, but in which he has no beneficial interest except as
such fiduciary; and 8,000 shares owned by three trusts of which Mr.
Leisenring is a co-trustee and with respect to which he shares voting and
investment power, but in which he has no beneficial interest except as
such fiduciary.
(2) These shares are held in a number of separate accounts including a total
of 236,966 shares owned by four trusts of which Fidelity Bank is co-
trustee with Mr. Leisenring and with respect to which it shares voting
and investment power. Such 236,966 shares are included in the 313,938
shares shown opposite Mr. Leisenring's name in the foregoing table. Also
includes 64,399 shares held by Fidelity Bank as trustee of the Company's
employees' retirement/savings plan for the accounts of employee
participants. Under such plan, the trustee will vote all shares held for
a participant's account as requested by the participant and absent
specific instructions from the participant the trustee may vote the
shares in its discretion. Also includes 62,832 shares held by Fidelity
Bank as custodian of the Company's employees' stock ownership plan (ESOP)
for the accounts of employee participants. Under such plan, the custodian
will vote all shares held for a participant's account as requested by the
participant.
(3) Interkohle Beteiligungsgesellschaft mbH is a wholly-owned subsidiary of
VEBA AG, a corporation organized under the laws of the Federal Republic
of Germany. Hans Michael Gaul and Eckhard Albrecht are directors of the
Company. Mr. Gaul is Deputy Chairman of the Management Board of
PreussenElektra AG, the majority shareholder of Interkohle, and a member
of the Management Board of VEBA AG. Mr. Albrecht is President of the
Board of Management of Stinnes Intercarbon AG, which is part of Stinnes
AG, a global trader owned by VEBA AG. The Company believes Interkohle
intends to vote such shares for the election of the nominees for
directors designated by the Board of Directors of the Company.
(4) These shares are held as follows: 379,250 shares beneficially owned by
Quest Advisory Corporation ("Quest") and with respect to which it has
sole voting and sole dispositive power and 24,600 shares beneficially
owned by Quest Management Company, a general partnership ("QMC") and with
respect to which it has sole voting and sole dispositive power. Each of
Quest and QMC are investment advisers registered under Section 203 of
the Investment Advisers Act of 1940 and Mr. Charles M. Royce is President
of both Quest and QMC. Mr. Royce may be deemed to be a controlling person
of Quest and QMC, and as such may be deemed to beneficially own the
shares beneficially owned by Quest and QMC. Mr. Royce does not own any
shares outside of Quest and QMC and disclaims beneficial ownership of the
shares held by Quest and QMC.
SECURITY OWNERSHIP OF MANAGEMENT
As of March 31, 1994, the 11 named executive officers and directors of the
Company beneficially owned an aggregate of 224,032 shares of the Company's
common stock, representing 5.17% of such shares outstanding on that date.
Included in this total are 55,700 shares of Company common stock which may be
purchased under options granted pursuant to the Company's incentive stock plan
which, for purposes of calculating the foregoing percentage of shares
beneficially owned by such officers and directors, were deemed to be
outstanding.
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The following table sets forth the beneficial ownership of the Company's
common stock by the named executive officers of the Company as of March 31,
1994:
SHARES OF COMPANY
COMMON
STOCK OWNED
BENEFICIALLY
ON MARCH 31, PERCENT
NAME 1994(1)(2)(3) OF CLASS
---- ------------------- --------
Lennox K. Black.............................. 21,226 --
A. James Dearlove............................ 13,747 --
Robert J. Jaeger............................. 11,577 --
Vincent Matthews............................. 11,309 --
- ---------
(1) Includes shares which may be purchased under options granted pursuant to
the Company's stock option plans as follows: Mr. Black -- 20,000, Mr.
Dearlove -- 9,700, Mr. Jaeger -- 7,900 and Mr. Matthews -- 10,000.
(2) Includes shares held by Fidelity Bank as trustee under the Company's
employees' retirement/savings plan vested as follows: Mr. Dearlove --
1,999, Mr. Jaeger -- 1,945, Mr. Matthews -- 194. These shares are included
in the shares reported as beneficially owned by Fidelity Bank.
(3) Includes shares held by Fidelity Bank as custodian under the Company's
employees' stock ownership plan (ESOP) as follows: Mr. Dearlove -- 2,048,
Mr. Jaeger -- 1,732 and Mr. Matthews -- 1,115. These shares are included
in the shares reported as beneficially owned by Fidelity Bank.
ELECTION OF DIRECTORS
The seven persons named in the following table, all of whom are now
directors of the Company, have been designated as nominees for election to the
Board for a one-year term. All of the incumbent directors were elected by the
shareholders of the Company. The persons named in the enclosed proxy intend to
vote for the election of these nominees unless directed otherwise. Each
nominee has consented to being named and to serve if elected. If any should
decline or be unable to serve, the persons named in the proxy will vote for
the election of such substitute nominee as shall have been designated by the
Board of Directors. The Company has no reason to believe that any nominee will
decline or be unable to serve.
SHARES OF
COMPANY
COMMON STOCK
OWNED
NAME, AGE, POSITION WITH THE COMPANY, BENEFICIALLY PERCENT
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR ON MARCH 31, OF
YEARS AND OTHER DIRECTORSHIPS SINCE 1994* CLASS
- ------------------------------------------------------------------------------
Eckhard Albrecht, 55(2)................... 1991 269 --
President, Stinnes Intercarbon AG (1988
to date).
Lennox K. Black, 64(1).................... 1983 21,226 --
Chairman and Chief Executive Officer
(April 1992 to date), Chairman of the
Board and chief executive officer,
Teleflex, Inc., equipment manufacturer
(1982 to date).
Director of Teleflex, Inc., Quaker
Chemical Corporation, Pep Boys and
Westmoreland Coal Company.
John D. Cadigan, 53(2).................... 1987 42,250(3) .99%
President, Rio Petrol, Inc., oil and gas
and investments (1984 to date); Vice
President, Campbell Investment Company,
investments (1976 to date).
Director of Rio Petrol, Inc., Campbell
Investment Company, Joshua Green
Corporation and Summit Bancorp, Inc.
Hans Michael Gaul, 52(1).................. 1989 552 --
Deputy Chairman of the Management Board
of PreussenElektra AG, electricity
supply industry, Member of the
Management Board of VEBA AG, industrial
company, Germany.
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SHARES OF
COMPANY
COMMON STOCK
OWNED
NAME, AGE, POSITION WITH THE COMPANY, BENEFICIALLY PERCENT
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR ON MARCH 31, OF
YEARS AND OTHER DIRECTORSHIPS SINCE 1994* CLASS
- ------------------------------------------------------------------------------
John A. H. Shober, 60(2).................. 1978 113,000(4) 2.41%
Vice Chairman of the Board (April 1992
to date); President and chief executive
officer (1989 to March 1992); President
and chief operating officer of the
Company (1978 to 1988).
Director of Betz Laboratories, Inc.,
Germantown Savings Bank, YMCA of
Philadelphia, Ensign-Bickford
Industries, Inc., MIBRAG mbH, and
Airgas, Inc. and member of Board of
Trustees of Eisenhower Exchange
Fellowships, Inc. and member of Board of
Trustees of Pennsylvania Hospital.
Frederick C. Witsell, Jr., 60............. 1972 2,325 --
Vice Chairman, J.P. Morgan Florida FSB
(Sept. 1993 to date); Managing Director,
Morgan Guaranty Trust Company of New
York (Feb. 1989 to Sept. 1993); Senior
Vice President, Morgan Guaranty Trust
Company of New York (1981 to Jan. 1989).
Director of J.P. Morgan Florida FSB.
Minturn T. Wright, III, 68(1)............. 1973 1,910 --
Partner, Dechert Price & Rhoads,
attorneys (1961 to date).
Director of The Philadelphia
Contributionship.
- ---------
* Based on information furnished to the Company by the respective nominees.
Except as indicated below, the Company is informed that the respective
nominees have sole voting and investment power with respect to the shares
shown opposite their names.
(1) These directors are members of the Executive and Compensation Committee.
(2) These directors are members of the Audit Committee.
(3) Includes 10,800 shares of Company common stock owned by Campbell
Investment Company (of which Mr. Cadigan is an officer and director) of
which Mr. Cadigan may be deemed to be a beneficial owner under
applicable rules of the Securities and Exchange Commission; 11,000
shares of Company common stock owned by Rio Petrol, Inc. (of which Mr.
Cadigan is an officer and director) of which Mr. Cadigan may be deemed
to be a beneficial owner. Also includes a total of 18,400 shares of
Company common stock held in a number of separate accounts with respect
to which Mr. Cadigan shares voting or investment power and may be deemed
to be a beneficial owner.
(4) Includes 10,000 shares which Mr. Shober may purchase under options
granted pursuant to the Company's 1992 Non-Qualified Stock Option Plan.
For purposes of calculating the percentage of outstanding shares owned
by Mr. Shober the 10,000 shares subject to such options were deemed to
be outstanding. Also includes 100,000 shares owned of record and
beneficially by The Sinkler Corporation (a wholly-owned subsidiary of
Wentz Corporation) of which Mr. Shober is a director and may be deemed
to be a beneficial owner under applicable rules of the Securities and
Exchange Commission.
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held six meetings during 1993. Each director except
Dr. Gaul attended more than 75% of the aggregate of the total number of such
meetings and the total number of meetings held in 1993 by all committees of
the Board of Directors on which he served. It was impossible for Dr.
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Gaul to attend two Board meetings of the Company held in 1993 due to important
business meetings he was required to attend in Germany on the same dates.
The Audit Committee of the Board of Directors, composed of Messrs. Cadigan
(Chairman), Shober and Albrecht, met three times during 1993. The Audit
Committee, which is elected annually, recommends to the Board of Directors
for its nomination independent public accountants to audit the books, records
and accounts of the Company, and reviews and approves the overall scope and
adequacy of the independent and internal audit programs and the proposed form
of the Company's consolidated financial statements. The Audit Committee also
reviews the results, findings and recommendations of audits performed by the
independent public accountants and the internal auditor, the system of
internal accounting controls, the significant accounting policies of the
Company as they apply to its consolidated financial statements, the audit fees
to be paid to the independent public accountants and the nature of non-audit
services performed by the independent public accountants.
The Compensation and Executive Committee ("Committee") of the Board of
Directors, composed of Messrs. Black (Chairman), Gaul and Wright, met once
during 1993. The Committee reviews and makes recommendations to the Board of
Directors regarding compensation for officers of the Company and periodically
reviews the Company's and subsidiaries' employee benefit programs and reports
its recommendations to the Board of Directors. In addition, the Committee
administers the Company's 1980, 1982 and 1992 Incentive Stock Plans. The
Committee, subject to certain exceptions, may exercise the powers of the Board
of Directors in the management of the business and affairs of the Company when
the Board is not in session.
The Board of Directors does not have a nominating committee.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth information for the
chief executive officer plus the other four most highly compensated executive
officers of the Company at December 31, 1993 for the years 1993, 1992 and
1991:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS(S) OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) SARS (#) ($) ($)(2)(3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lennox K. Black, 1993 75,000 -0- 30,132 (1) -0- -0- -0- -0-
Chairman and Chief 1992 18,750 -0- 29,924 -0- 20,000 -0- -0-
Executive Officer 1991 -0- -0- -0- -0- -0- -0- -0-
Vincent Matthews, III, 1993 171,600 40,000 11,232 -0- -0- -0- 23,060
Senior Vice President 1992 187,216 8,580 9,539 -0- 10,000 -0- -0-
1991 153,800 10,000 5,348 -0- -0- -0- -0-
A. James Dearlove, 1993 147,450 40,000 5,817 -0- -0- -0- 19,659
Senior Vice President 1992 137,450 7,372 6,018 -0- 6,000 -0- -0-
1991 130,800 --0- 5,943 -0- -0- -0- -0-
Robert J. Jaeger,
Vice President, 1993 117,600 40,000 11,232 -0- -0- -0- 16,062
Treasurer and 1992 117,600 5,880 11,830 -0- 6,000 -0- -0-
Controller 1991 113,800 -0- 5,617 -0- -0- -0- -0-
Daniel W. Carroll, 1993 98,000 5,000 7,225 -0- -0- -0- 78,937
Vice President 1992 117,600 24,403 9,835 -0- 5,000 -0- -0-
(until 10/21/93) 1991 120,475 14,139 3,377 -0- -0- -0- -0-
<FN>
(1) Includes $18,900 paid to Mr. Black for fees and annual retainer as a
director of the Company and $11,232 for car allowance.
5
<PAGE>
(2) All Other Compensation for the named executive officers in 1993 consisted
of Company contributions to the retirement/savings plan, Company
contributions to the employees' stock ownership plan (ESOP) and life
insurance premiums. Amounts contributed to the retirement/savings plans
during 1993 included: Mr. Matthews -- $1,800, Mr. Dearlove -- $1,800, Mr.
Jaeger -- $1,800 and Mr. Carroll -- $1,800. Amounts contributed to the
employees' stock ownership plan during 1993 included: Mr. Matthews --
$19,567, Mr. Dearlove -- $16,815, Mr. Jaeger -- $13,413 and Mr. Carroll --
$7,690. Company paid life insurance premiums included: Mr. Matthews --
$1,693, Mr. Dearlove -- $1,044, Mr. Jaeger -- $849 and Mr. Carroll --
$1,830. Mr. Carroll was a Vice President of the Company and President of
its wholly-owned subsidiary, Tenn Luttrell Company, until October 21, 1993
when the subsidiary was sold and Mr. Carroll left the employ of the
Company. Upon the sale of the subsidiary, Mr. Carroll received $7,000 for
vacation pay and a one-time payment of $60,617 and he elected to take early
retirement under the Company's pension plan and started receiving a monthly
pension benefit from the Company in November 1993.
(3) Under the Company's policy concerning severance benefits, senior officers
(including all executive officers) whose employment is terminated
following a change in control (as defined in the policy) of the Company
will receive severance pay according to a formula which takes into account
the officer's age, salary and length of service with the Company. The
maximum amount payable to a senior officer under the policy is 250% of
then-current annual salary. The amounts under the severance policy to the
executive officers listed in the table if they were terminated on the date
of this proxy statement following a change of control would be:
Mr. Matthews....................... 16 months or $228,800
Mr. Dearlove....................... 17.5 months or $215,031
Mr. Carroll........................ 20 months or $196,000
Mr. Jaeger......................... 17.5 months or $171,500
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No Options/SAR's were granted by the Company during 1993.
The following table presents information regarding the number of
unexercised options to purchase common shares and the number of unexercised
stock appreciation rights at December 31, 1993:
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF NUMBER OF
UNEXERCISED UNEXERCISED
OPTIONS AT SAR'S AT
NAME DECEMBER 31, 1993 DECEMBER 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Lennox K. Black 20,000 -0- -0- -0-
Vincent Matthews, III 10,000 -0- -0- -0-
A. James Dearlove 15,700 -0- -0- -0-
Robert J. Jaeger 13,900 -0- -0- -0-
Daniel W. Carroll* -0- -0- -0- -0-
<FN>
*Options expired on October 21, 1993 when Mr. Carroll left the Company.
</TABLE>
No member of the named executive officer group exercised any options or
SAR's during 1993. None of the options or SAR's were in-the-money, as their
exercise prices exceeded the stock market price of the Company's underlying
common stock.
BOARD COMPENSATION AND EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board Compensation and Executive Committee ("Committee") makes
recommendations to the Board of Directors as to the salaries of the Chief
Executive Officer and the highly compensated executive officers of the
Company.
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The Committee met in 1994 to examine the current compensation of all
executive officers of the Company, including the named executive officers.
For 1993 earnings from operations (excluding a writedown in the carrying
value of the Company's investment in Westmoreland) were at an all-time high.
Free cash flow for 1993 was $34.1 million and revenues, earnings and cash
flows from oil and gas were at record high levels. The sale of the lime and
limestone operations produced an after-tax gain of $5.7 million and overhead
costs were reduced by 30%.
In light of the positive achievements made by the Company in 1993 the
Committee awarded cash bonuses to the named executive officers as shown in the
Summary Compensation Table on page 5. Messrs. Matthews, Dearlove and Jaeger
also received salary increases for 1994 which will be reported in next years'
proxy statement. Mr. Black did not receive a bonus for 1993 or a salary
increase in 1994.
Lennox K. Black Hans Michael Gaul Minturn T. Wright, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation and Executive Committee of the Board of Directors was
composed of Messrs. Black (Chairman), Gaul and Wright for the year ending
December 31, 1993. Mr. Black served as Chairman of the Board and Chief
Executive Officer of the Company for the year ending December 31, 1993.
COMPENSATION OF DIRECTORS
Each director of the Company receives $650 for each meeting he attends of
the Board of Directors and of any committee on which he serves and $750 for
committee chairmen attending their respective committee meetings. Directors
who are not employees of the Company or its subsidiaries, except for Mr.
Shober, also receive an annual retainer fee of $15,000 of which $7,000 can be
used to purchase stock of the Company, or, beginning in 1993, can be paid in
cash at the election of the Director each year. Mr. Shober receives a cash
retainer of $2,000 per month for services as a consultant.
PERFORMANCE GRAPH
The following graph shows changes over the past five years in the value of
$100 invested in (1) Standard and Poor's Industrials Index; (2) the Standard
and Poor Energy Index; and (3) Penn Virginia Corporation Common Stock.
The year-end values of each investment are based on share price
appreciation plus dividends paid in cash, with the dividends invested on the
date they were paid.
7
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CUMULATIVE SHAREHOLDER RETURN
DECEMBER 31, 1988 TO DECEMBER 31, 1993
PERFORMANCE GRAPHIC IS HERE ON PRINTED PROXY
EMPLOYEES' RETIREMENT/SAVINGS PLAN
Employees of the Company and its subsidiaries and affiliates which have
joined in the Penn Virginia Corporation and Affiliated Companies Employees'
Retirement/Savings Plan (the "Plan"), who are not covered by a collective
bargaining agreement and who have completed twelve months of service within
which they have been credited with at least 1,000 hours of service, may
participate in the Plan.
Under the Plan, an employee may elect to contribute to the Plan up to 10%
of his eligible monthly compensation. These contributions may be either salary
deferral contributions, whereby an employee elects to defer a portion of his
salary and have the deferred amount contributed to the Plan, or savings
contributions. Both forms of contributions reduce the amount of compensation
that would otherwise be paid to an employee, but salary deferral contributions
are intended to qualify for the federal income tax treatment provided by
section 401(k) of the Internal Revenue Code ("Code"). The committee
administering the Plan has the right to raise the percentage of compensation
an employee may defer and contribute to the Plan to up to 15%. The Company
makes matching contributions to the Plan on behalf of each participant, up to
a maximum of 6% of the participant's compensation. Beginning July 1, 1988, the
annual matching contribution was limited to $1,800 per employee for any
calendar year. Matching contributions are made to the trustee of the Plan
(Fidelity Bank, Philadelphia, Pennsylvania), which uses the contributions to
purchase common stock of the Company for participating employees' accounts.
Employee contributions are made to the trustee which makes investments
according to individual employee elections.
Once each plan year, a participant who has attained age 60 may direct the
trustee to sell a portion of the shares in his account and transfer the
proceeds to a fixed investment fund at The Vanguard Group which provides the
participant with a variable rate of return on the amount so invested.
PENSION PLAN
The Company sponsors a pension plan for employees of the Company and its
subsidiaries to which employees make no contributions. In general, the plan
provides for payment of annual retirement benefits to eligible employees who
retire at the normal retirement age of 65. A career average benefit formula
determines the pension payment which is based on the years of service and the
annual earnings
8
<PAGE>
of the employee. The plan is designed to provide a retirement income, when
combined with Social Security benefits, which will maintain the long-term
employee's standard of living at the time of retirement. The plan also
provides for deferred retirement benefits for disabled employees and for
reduced benefits for early retirement.
The following table shows the estimated annual pension benefits payable to
employees of the Company, including officers, upon retirement at age 65, in
various remuneration and years-of-service classifications, assuming the
election of a pension benefit payable as a life annuity with five years
certain. The table is representative of an employee who is currently 65 and
whose salary remained unchanged during his last five years of employment.
Benefit amounts set forth in the table are not presently subject to any
deduction for Social Security benefits or other offset amounts.
Years of service credited under the pension plan for the following
individuals are: Mr. Carroll -- 16 years, Mr. Matthews -- 5 years, Mr.
Dearlove -- 16 years and Mr. Jaeger -- 18 years.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFIT FOR YEARS OF SERVICE INDICATED
ANNUAL --------------------------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- -------------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$125,000 $24,375 $32,500 $40,625 $48,750 $ 56,875 $ 65,000
150,000 29,250 39,000 48,750 58,500 68,250 78,000
175,000 34,125 45,500 56,875 68,250 79,625 91,000
200,000 39,000 52,000 65,000 78,000 91,000 104,000
225,000 43,875 58,500 73,125 87,750 102,375 115,641*
250,000 45,989* 61,318* 76,648* 91,978* 107,307* 115,641*
275,000 45,989* 61,318* 76,648* 91,978* 107,307* 115,641*
300,000 45,989* 61,318* 76,648* 91,978* 107,307* 115,641*
<FN>
* Currently limited by $115,641 maximum benefit. Any amount over the $115,641
maximum benefit is considered an unfunded liability to the Company.
Effective January 1, 1994 the maximum benefit increased to $118,800. In
1993, the maximum includable annual compensation was $235,840. Effective
January 1, 1994 maximum includable annual compensation decreased to
$150,000.
</TABLE>
1980 INCENTIVE STOCK PLAN
Under the terms of its 1980 Incentive Stock Plan the Company may offer an
aggregate of 200,000 shares (subject to adjustments for stock dividends, stock
splits and the like) of the Company's common stock to officers and key
employees in a management role of the Company and its 50%-or-more-owned
subsidiaries upon the exercise of stock options or stock appreciation rights
granted to them pursuant to the 1980 Incentive Stock Plan. A stock
appreciation right gives the holder, as an alternative to the exercise of the
related stock option, the right to receive, without payment to the Company,
any appreciation in the value of the shares subject to the related option that
has taken place between the dates of grant and exercise. Subject to certain
restrictions, the holder may receive this gain in cash or stock or in a
combination of both. A stock option or stock appreciation right granted under
the 1980 Plan may be exercised at any time after twelve months and prior to
ten years following the date it is granted. Upon exercise of a stock option
any related stock appreciation right automatically expires. Upon exercise of a
stock appreciation right the stock option to which it is attached
automatically expires.
1992 NON-QUALIFIED STOCK OPTION PLAN
In April 1992 the Board of Directors approved a non-qualified stock option
plan for directors. Under the terms of the Plan the Company may offer an
aggregate of 30,000 shares of the Company's common stock to non-employee
directors. A stock option granted under the 1992 plan may be exercised at any
time after twelve months and prior to four years following the date it is
granted.
EMPLOYEES' STOCK OWNERSHIP PLAN (ESOP)
Effective June 1, 1985, the Company established an Employee Stock
Ownership Plan (ESOP) and Trust for the benefit of employees. All employees of
the Company and its subsidiaries and affiliates, who are not covered by a
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collective bargaining agreement and who have completed 12 months of service
within which they have been credited with at least 1,000 hours of service,
automatically become participants in the ESOP. The Trust borrowed $6,000,000
and the proceeds of the loan were used to purchase a total of 122,583 shares
of Company common stock. The stock will be held in an unallocated stock
account and then allocated to participants' accounts as the loan is paid off
and will be paid to participating employees and their beneficiaries upon
retirement or other termination of service. Participants are neither required
nor permitted to make contributions to the ESOP.
Under the loan agreement, the Company guaranteed the loan and is obligated
to make annual contributions sufficient to enable the Trust to repay the loan,
including interest. Principal on the loan is due in forty quarterly
installments of $150,000 and the first payment was made in September 1985.
When a payment is made on the loan, stock is released for allocation to
participants' accounts in the proportion that each participant's compensation
bears to the total compensation of all participants.
TRANSACTIONS WITH OTHER COMPANIES
Lennox K. Black, who is Chairman and Chief Executive Officer and a
director of the Company and nominee for reelection as a director, and E. B.
Leisenring, Jr., who is the beneficial owner of 7.34% of the Company's
outstanding stock, are directors of Westmoreland Coal Company
("Westmoreland"). The Company, through a subsidiary, owns 1,754,411 shares, or
approximately 25.2% of the outstanding shares of common stock of Westmoreland
and approximately 18.9% of the total voting power of Westmoreland. During 1993
Penn Virginia Resources Corporation, a wholly-owned subsidiary of the Company,
leased to Westmoreland coal reserves and land on which Westmoreland has built
coal preparation plants and other structures for which the Company received
royalties of $11,699,000 on the coal mined.
In June 1986, $10,000,000 of 9% senior unsecured notes were placed through
Morgan Guaranty Trust Company of New York (a subsidiary of J.P. Morgan & Co.
Incorporated) with Metropolitan Life Insurance Company. The proceeds were used
to reduce floating interest rate debt. Principal on the notes is due in annual
installments of $1,425,000 beginning June 1990 through June 1995, with a final
installment of $1,450,000 in June 1996. Frederick C. Witsell, Jr., a director
of the Company and a nominee for reelection, was Managing Director of Morgan
Guaranty Trust Company until September 1993 when he retired. Mr. Witsell is
currently Vice Chairman, J.P. Morgan Florida FSB a subsidiary of J.P. Morgan &
Co. Incorporated. Morgan Guaranty Trust Company performs investment banking
services for the Company for which fees are received.
Minturn T. Wright, III, a director and nominee for reelection as a
director, is a partner in the law firm of Dechert Price & Rhoads. Dechert
Price & Rhoads received fees for legal services rendered during 1993 to the
Company and its subsidiaries.
The Company believes that the foregoing transactions were on terms fair
and reasonable to the Company and were on terms no less favorable to the
Company than if the transactions had been entered into with unaffiliated
companies.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and persons who own more than ten percent of
a registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based on its review of the copies of such forms received by it, the
Company believes that during 1993 all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with.
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FINANCIAL AND OTHER INFORMATION
KPMG Peat Marwick served as the Company's independent certified public
accountants for the year 1993 and will continue to serve as such for the
Company in 1994. A representative of that firm will be present at the Annual
Meeting and will have the opportunity to make a statement, if he desires to do
so, and to respond to appropriate questions from shareholders.
UPON THE WRITTEN REQUEST OF ANY PERSON WHO ON THE RECORD DATE WAS A RECORD
OWNER OF COMPANY COMMON STOCK, OR WHO REPRESENTS IN GOOD FAITH THAT HE WAS ON
SUCH DATE A BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO VOTE AT THE ANNUAL
MEETING, THE COMPANY WILL SEND TO SUCH PERSON, WITHOUT CHARGE, A COPY OF ITS
ANNUAL REPORT ON FORM 10-K FOR 1993, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. REQUESTS FOR THIS REPORT SHOULD BE DIRECTED TO BARBARA A. SHAW,
CORPORATE SECRETARY, PENN VIRGINIA CORPORATION, 800 THE BELLEVUE, 200 S. BROAD
STREET, PHILADELPHIA, PA. 19102.
SHAREHOLDER PROPOSALS
ANY PROPOSAL SUBMITTED BY SHAREHOLDERS FOR INCLUSION IN THE COMPANY'S
PROXY STATEMENT AND PROXY FOR THE 1995 ANNUAL MEETING OF SHAREHOLDERS OF THE
COMPANY MUST BE RECEIVED BY THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES NO
LATER THAN NOVEMBER 28, 1994, AND MUST COMPLY IN ALL OTHER RESPECTS WITH
APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
RELATING TO SUCH INCLUSION.
OTHER BUSINESS
The Board of Directors has no present intention of bringing any other
business before the meeting and has not been informed of any other matters
that are to be presented to the meeting. If any such matters properly come
before the meeting, however, the persons named in the enclosed proxy will vote
in accordance with their best judgment.
By order of the Board of Directors,
Barbara A. Shaw
Corporate Secretary
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