UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. [ ])
Filed by the Registrant [X ]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e) (2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
-----------------------------------------------------
PENN VIRGINIA 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)(1)
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
O-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule O-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:
PENN VIRGINIA CORPORATION
ONE RADNOR CORPORATE CENTER
SUITE 200
100 MATSONFORD ROAD
RADNOR, PENNSYLVANIA 19087
------------------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
------------------------
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Penn Virginia Corporation (the "Company") to be held at the Radnor Hotel, 591
East Lancaster Avenue, Lincoln Room, St. Davids, Pennsylvania 19087, Tuesday,
May 5, 1998, at 10:00 a.m., prevailing time, to consider and act on the
following matters:
1. The election of eight directors to serve until the next Annual
Meeting of Shareholders, or until their successors are duly
elected and qualified; and
2. The transaction of such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 6, 1998
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
A copy of the Company's Annual Report for the year ended December 31,
1997 is being mailed to shareholders together with this Notice.
In order that your shares may be represented at the Annual Meeting,
please complete, date and sign the enclosed proxy card and return it promptly
in the accompanying envelope.
By Order of the Board of Directors
/S/ NANCY M. SNYDER
-----------------------------------
Nancy M. Snyder
Corporate Secretary
Radnor, Pennsylvania
March 27, 1998
<PAGE>
PENN VIRGINIA CORPORATION
------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1998
------------------------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy are being furnished to
shareholders of Penn Virginia Corporation (the "Company") in connection with
the solicitation by or on behalf of the Board of Directors of the Company of
proxies to be voted at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held at 10:00 a.m., prevailing time, on May 5, 1998 and at
any adjournment, postponement or continuation thereof, at the Radnor Hotel,
591 East Lancaster Avenue, Lincoln Room, St. Davids, Pennsylvania 19087. This
Proxy Statement and the accompanying proxy are first being mailed on or about
March 27, 1998. The Company's principal executive offices are located at One
Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania
19087.
RECORD DATE AND VOTING RIGHTS
Only shareholders of record at the close of business on March 6, 1998
will be entitled to vote at the Annual Meeting. On that date there were
outstanding 8,279,758 shares of Common Stock, par value $6.25 per share. On
each matter to come before the Annual Meeting, holders of Common Stock will
be entitled to one vote for each share held. 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 holders of 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. Cumulative voting rights do not exist with respect to
the election of directors.
REVOCABILITY AND VOTING OF PROXY
All shareholders, regardless of whether they expect to attend the Annual
Meeting in person, are requested to vote, date, sign and promptly return the
enclosed proxy in the accompanying envelope. Each shareholder has the right
to revoke a proxy by filing with the Secretary of the Company a written
revocation before the proxy is voted, by submitting to the Company before the
taking of the vote a duly executed proxy bearing a later date or by voting
the shares subject to such proxy by written ballot at the Annual Meeting. Any
shareholder may attend the Annual Meeting and vote in person whether or not a
proxy was previously submitted. Attendance at the Annual Meeting will not in
and of itself constitute the revocation of a proxy.
The three officers of the Company designated as proxies to vote shares
at the Annual Meeting will vote in accordance with the instructions on the
proxy card. If no specific voting instructions are given with respect to the
matters to be voted upon, the shares represented by each signed proxy will be
voted FOR the election of each of the nominees to the Company's Board of
Directors. Management does not expect any matters other than the election of
directors to be presented for action at the Annual Meeting.
PROXY SOLICITATION
The expenses of solicitation of proxies, including the cost of preparing
and mailing this Proxy Statement and the accompanying material, 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. Some
officers and employees may solicit proxies personally, by telephone or by
mail and will not be additionally compensated therefor.
<PAGE> 1
ELECTION OF DIRECTORS
Eight directors will be elected at the Annual Meeting, seven of whom are
standing for re-election this year. Minturn T. Wright, III, a director since
1973, retired from the Board in October 1997. Richard A. Bachmann was elected
to fill the vacancy created by Mr. Wright's retirement. The eight directors
nominated by the Board for election at the 1998 Annual Meeting are Richard A.
Bachmann, Lennox K. Black, John D. Cadigan, A. James Dearlove, Robert
Garrett, Joe T. Rye, John A. H. Shober and Frederick C. Witsell, Jr. The
nominees, if elected, will serve until the next Annual Meeting of
Shareholders and until their respective successors are duly elected and
qualified. Although all nominees currently intend to serve on the Board, if
any nominee should decline or be unable to serve, the Board will designate a
substitute nominee. The Company has no reason to believe that any nominee
will decline or be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF THE EIGHT NOMINEES.
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTOR
<TABLE>
Following is information regarding the age, positions held with the
Company, business experience during the past five years and other
directorships held by each nominee for director.
<CAPTION>
AGE, POSITION WITH THE COMPANY, BUSINESS EXPERIENCE DIRECTOR
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE
- ------------------------------------------------------------- ---------
<S> <C>
RICHARD A. BACHMANN, age 53 1997<F3>
President and Chief Executive Officer of Energy Partners,
LLC, oil and gas exploration and production (Jan. 1997 to
date); President and Chief Operating Officer (Oct. 1995 to
Jan. 1997) and Executive Vice President--Finance and
Administration (May 1989 to Oct. 1995) of Louisiana Land and
Exploration Company. Director of Energy Partners, LLC.
LENNOX K. BLACK, age 68 1984<F1>
Chairman of the Company's Board of Directors (1992 to date);
Chief Executive Officer of the Company (April 1992 to May
1996); Chief Executive Officer of Teleflex, Inc.,
manufacturer of automotive, marine, industrial, aerospace
and medical products to markets worldwide (1971 to 1995).
Chairman of the Board of Teleflex, Inc., Director of Quaker
Chemical Corporation, The Pep Boys-Manny, Moe & Jack and
Imagemax, Inc.
JOHN D. CADIGAN, age 57 1987<F1>
President of Rio Petrol, Inc., oil and gas investments (1984
to date); Vice President of Campbell Investment Company,
investments (1976 to date); President of Cadigan Corp.,
investments (1980 to date). Director of Rio Petrol, Inc.,
Campbell Investment Company, Cadigan Corp. and Joshua Green
Corporation.
A. JAMES DEARLOVE, age 50 1996<F1>
President and Chief Executive Officer of the Company (May
1996 to date); President and Chief Operating Officer of the
Company (1994 to May 1996); Senior Vice President of the
Company (1992 to 1994). Director of Powell River Project,
National Council of Coal Lessors and Safe Harbor of West
Chester.
<PAGE> 2
ROBERT GARRETT, age 61 1997<F2>
President of AdMedia Partners, Inc., investment banking firm
serving media and advertising businesses (1990 to date);
President of Robert Garrett & Sons Inc., venture investing
and financial advisory company (1986 to date). Director
(Chairman) of Southeast Publishing Ventures, Inc. and
Mickelberry Communications, Inc.
JOE T. RYE, age 59 1997<F3>
President of Joe T. Rye, P.C., business consulting (1992 to
date) and a rancher (1979 to date); President and Chief
Executive Officer of Universal Seismic Associates, Inc., oil
and gas exploration and production and seismic acquisition
and processing (Nov. 1997 to date). Director of Universal
Seismic Associates, Inc.
JOHN A. H. SHOBER, age 64 1978<F2><F3>
Vice Chairman of the Company's Board of Directors (April
1992 to 1996). Chairman of the Board of Anker Coal Group,
Inc., Director of BetzDearborn, Inc., C & D Technologies,
Inc., Eisenhower Exchange Fellowships, Ensign Bickford
Industries, Inc., First Reserve Corporation and MIBRA GmbH.
FREDERICK C. WITSELL, JR., age 64 1972<F1><F2>
Vice Chairman of J. P. Morgan Florida FSB (Sept. 1993 to
date); Managing Director of Morgan Guaranty Trust Company of
New York (Feb. 1989 to Jan. 1994). Director and Vice
Chairman of J. P. Morgan Florida FSB.
<FN>
<F1> Member of the Executive Committee
<F2> Member of the Compensation and Benefits Committee
<F3> Member of the Audit Committee
</FN>
</TABLE>
ADDITIONAL INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held six meetings during 1997. The Board has
three committees consisting of the Executive Committee, the Compensation and
Benefits Committee and the Audit Committee. The Board does not have a
nominating committee. Each director attended at least 75 percent of the
aggregate of all meetings of the Board of Directors and committees of the
Board on which he served.
The Executive Committee, subject to certain exceptions and applicable
law, has and may exercise the full power of the Board in managing the
business and affairs of the Company when the Board is not in session. The
Executive Committee, composed of Messrs. Black (Chairman), Dearlove, Cadigan
and Witsell, did not meet in 1997.
The Compensation and Benefits Committee, composed of Messrs. Shober
(Chairman), Garrett and Witsell, reviews and makes recommendations to the
Board of Directors regarding compensation for officers of the Company,
periodically reviews the Company's and its subsidiaries' employee benefit
plans and reports its recommendations to the Board of Directors. The
Compensation and Benefits Committee met once in 1997.
The Audit Committee, composed of Messrs. Rye (Chairman), Bachmann and
Shober, met twice in 1997. The Audit Committee examines the activities of the
Company's independent auditors and internal audit department to determine
whether such activities are reasonably designed to assure the soundness of
accounting and financial procedures. The Audit Committee annually reviews the
Company's accounting policies and the objectivity of its financial reporting
and considers the qualifications of the Company's independent auditors and
the scope of their audit and makes recommendations to the Board as to their
selection.
<PAGE> 3
COMPENSATION OF DIRECTORS
Each non-employee director receives 600 shares of the Company's Common
Stock and $5,000 cash on the Annual Meeting date. Directors appointed between
Annual Meeting dates will receive a pro rata portion of shares and cash. Each
non-employee director also receives $650 for each Board of Directors and
committee meeting he attends. Committee chairmen receive an additional $100
for each meeting they chair.
Under the 1995 Directors' Stock Option Plan, each director is granted an
option to purchase 10,000 shares of the Company's Common Stock upon his
appointment to the Board and on the first business day of each of the years
1996 through 1999 has or will receive an option to purchase 100 or, in the
case of each such year commencing after August 15, 1996, the effective date
of the Company's two-for-one stock split, 200 additional shares of the
Company's Common Stock.
Under the terms of his consulting agreement with the Company, the
Company paid to Lennox K. Black $7,232 ($6,250 consulting fee and $936 car
allowance) for the month of January 1997. Subject to his remaining Chairman
of the Board, Mr. Black will receive $5,103 per month ($4,167 consulting fee
and $936 car allowance) for the period February 1997 through the date of the
1999 Annual Meeting. Mr. Black served as Chief Executive Officer of the
Company from April 1992 to May 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth information regarding persons known by
the Company to beneficially own more than five percent of the Company's
outstanding Common Stock as of December 31, 1997. All such information is
based on information furnished to the Company by the respective shareholders
or contained in filings submitted to the Securities and Exchange Commission
(the "SEC") such as Schedules 13D and 13G.
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP OF PERCENT
NAME AND ADDRESS COMMON STOCK OF CLASS<F1>
- ------------------------------------------ ----------------- ------------
<S> <C> <C>
T. ROWE PRICE ASSOCIATES, INC. 957,800 <F2> 11.58%
100 East Pratt Street
Baltimore, Maryland 21202
DIMENSIONAL FUND ADVISORS INC. 647,500 <F3> 7.83%
299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
E. B. LEISENRING, JR. 585,117 <F4> 7.08%
One Tower Bridge, Suite 501
West Conshohocken, Pennsylvania 19428
FIRST UNION CORPORATION 464,156 <F5> 5.61%
NCO137
Charlotte, NC 28288
TWEEDY BROWNE 414,873 <F6> 5.01%
52 Vanderbilt Avenue
New York, New York 10017
<FN>
<F1> Based on 8,274,326 shares of Common Stock issued and outstanding on
December 31, 1997.
<F2> These shares are owned by various individual and institutional investors
including T. Rowe Price Small Cap Value Fund, Inc. (which owns 450,000
shares, representing 5.4% of the shares outstanding), to which T. Rowe Price
Associates, Inc. (Price Associates) serves as investment adviser with power
to direct investments and/or sole power to vote the shares. For purposes of
the
<PAGE> 4
reporting requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), Price Associates is deemed to be a beneficial owner of such shares;
however, Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such shares.
<F3> Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 647,500 shares as of
December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
<F4> Includes 62,169 shares held by Mr. Leisenring; 27,400 shares held by Mr.
Leisenring's spouse; 269,616 shares held by four trusts of which Mr.
Leisenring is co-trustee with First Union National Bank and with respect to
which he shares voting and investment power; 26,002 shares held by three
trusts of which Mr. Leisenring is co-trustee with Mellon Bank and with
respect to which he shares voting and investment power; and 200,000 shares
held by Sinkler Corporation, a wholly-owned subsidiary of Wentz Corporation,
of which Mr. Leisenring is a director. Mr. Leisenring expressly disclaims
beneficial ownership of the shares held by Sinkler Corporation.
<F5> Includes 281,544 shares over which First Union Corporation had sole
voting power and 172,800 shares and 270,216 shares over which First Union
Corporation had sole and shared dispositive power, respectively.
<F6> Of the total 414,873 shares, Tweedy Brown had sole voting authority over
399,009 shares and no voting authority over 15,864 shares.
</FN>
</TABLE>
<TABLE>
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock by incumbent directors, nominees for
director, the executive officers named in the Summary Compensation Table (the
"Named Executives") and all directors and executive officers as a group as of
March 16, 1998.
<CAPTION>
AMOUNTS AND NATURE
DIRECTORS, NOMINEES OF BENEFICIAL PERCENT OF
AND EXECUTIVE OFFICERS OWNERSHIP OF COMMON STOCK <F1> CLASS <F2>
- ------------------------- ------------------------------ ----------
<S> <C> <C>
Richard A. Bachmann 674
Lennox K. Black 263,452<F3> 3.11%
John D. Cadigan 76,884<F4>
A. James Dearlove 256,759<F5> 3.02%
Robert Garrett 12,600<F6>
Joe T. Rye 10,600<F7>
John A. H. Shober 227,000<F8> 2.74%
Frederick C. Witsell, Jr. 21,000<F9>
David R. Barker 73,257<F10>
Keith D. Horton 151,370<F11> 1.80%
Steven W. Tholen 152,795<F12> 1.82%
All directors, nominees for
director and executive
officers as a group
(11 persons) 1,206,391<F13> 13.30%
<FN>
<F1> Unless otherwise indicated, all shares are owned directly by the named
person and such person has sole power to vote and dispose of such shares.
Includes all options that are exercisable by the named person prior to May
16, 1998.
<F2> Unless otherwise indicated, beneficial ownership is less than 1% of the
Company's outstanding Common Stock.
<F3> Includes options to purchase 200,400 shares and 2,000 shares held by Mr.
Black's spouse.
<F4> Includes options to purchase 10,400 shares; 1,400 shares held in Mr.
Cadigan's Keogh account; 2,000 shares owned by Cadigan Corp. (of which Mr.
Cadigan is an officer and director); 200
<PAGE> 5
shares held in Mr. Cadigan's IRA; 15,700 shares owned by Campbell Investment
Company (of which Mr. Cadigan is an officer and director); 14,000 shares
owned by Rio Petrol, Inc. (of which Mr. Cadigan is an officer and director);
814 shares owned by an estate (of which Mr. Cadigan is the beneficiary); and
a total of 30,084 shares held in a number of separate accounts with respect
to which Mr. Cadigan shares voting or investment power.
<F5> Includes options to purchase 232,600 shares; 4,320 shares held in Mr.
Dearlove's deferred compensation account; and 8,330 shares held in Mr.
Dearlove's ESOP account.
<F6> Includes options to purchase 10,000 shares.
<F7> Includes options to purchase 10,000 shares.
<F8> Includes options to purchase 10,400 shares and 200,000 shares owned by
Sinkler Corporation, a wholly-owned subsidiary of Wentz Corporation, of which
Mr. Shober is a director.
<F9> Includes options to purchase 10,400 shares.
<F10> Includes options to purchase 70,000 shares; 359 shares held in Mr.
Barker's deferred compensation account; and 398 shares held in Mr. Barker's
ESOP account.
<F11> Includes options to purchase 102,000 shares; options to purchase 38,500
shares held by Mr. Horton's spouse; 1,251 shares held in Mr. Horton's
deferred compensation account; 1,274 shares held in his spouse's deferred
compensation account; 4,714 shares held in Mr. Horton's ESOP account; and
3,631 shares held in his spouse's ESOP account.
<F12> Includes options to purchase 130,000 shares and 895 shares held in Mr.
Tholen's ESOP account.
<F13> Includes options to purchase 788,900 shares; 7,024 shares in the
employees' deferred compensation accounts and 17,968 shares in the ESOP
accounts of executive officers.
</FN>
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than ten percent of the Company's Common
Stock to file, by a specified date, reports of beneficial ownership and
changes in beneficial ownership with the SEC and to furnish copies of such
reports to the Company. The Company believes that all such persons filed such
reports in a timely fashion during 1997, except Interkohle
Beteiligungsgesellschaft mbH ("Interkohle"), formerly the owner of
approximately 20 percent of the Company's Common Stock, which failed to file
on a timely basis one report on Form 4 regarding the disposition of all of
the Company's Common Stock held by Interkohle.
<PAGE> 6
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation of the
Named Executives for each of the years 1997, 1996 and 1995, respectively.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL
COMPENSATION
---------------------------------------
OTHER ANNUAL
NAME AND SALARY BONUS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) <F1>
- ---------------------- ---- --------- --------- ---------------
<S> <C> <C> <C> <C>
A. James Dearlove 1997 260,000 50,000
President and Chief 1996 240,000 30,000
Executive Officer 1995 200,000 40,000
Steven W. Tholen 1997 160,000 30,000
Vice President and Chief 1996 150,000 15,000
Financial Officer <F4> 1995 75,836 -0- 27,351 <F5>
Keith D. Horton 1997 130,000 25,000
Vice President <F7> 1996 120,000 15,000
David R. Barker 1997 136,000 25,000
Vice President <F9> 1996 100,000 -0-
<CAPTION>
LONG-TERM
COMPENSATION
---------------
SECURITIES
UNDERLYING ALL
NAME AND OPTIONS OTHER
PRINCIPAL POSITION (#) <F2> COMPENSATION
- ---------------------- --------------- -------------
<S> <C> <C>
A. James Dearlove 40,000 14,254 <F3>
President and Chief 110,000 15,850
Executive Officer 40,000 26,320
Steven W. Tholen 40,000 14,304 <F6>
Vice President and Chief 70,000 10,342
Financial Officer <F4> 20,000 400
Keith D. Horton 30,000 13,830 <F8>
Vice President <F7> 40,000 12,342
David R. Barker 30,000 11,171 <F11>
Vice President <F9> 40,000 321
<F1> Unless otherwise indicated, total Other Annual Compensation is less than
10 percent of the Named Executive's total annual salaries and bonus.
<F2> Numbers of shares reflect the Company's two-for-one stock split
effective as of August 15, 1997.
<F3> Includes Company contributions to Mr. Dearlove's deferred compensation
account, ESOP account and life insurance premiums of $4,000, $8,526 and
$1,728, respectively.
<F4> Mr. Tholen joined the Company as Vice President and Chief Financial
Officer in June 1995.
<F5> Includes $4,366 attributable to Mr. Tholen's personal use of a Company
car and a $22,985 moving allowance.
<F6> Includes Company contributions to Mr. Tholen's deferred compensation
account, ESOP account and life insurance premiums of $4,000, $9,370 and $934,
respectively.
<F7> Mr. Horton was named Vice President of the Company in February 1996.
<F8> Includes Company contributions to Mr. Horton's deferred compensation
account, ESOP account and life insurance premiums of $4,000, $9,273 and $557,
respectively.
<F9> Mr. Barker joined the Company as Vice President in March 1996.
<F10> Includes $3,339 attributable to Mr. Barker's personal use of a Company
car, a $10,833 moving allowance and $31,024 of moving expenses.
<F11> Includes Company contributions to Mr. Barker's deferred compensation
account, ESOP account and life insurance premiums of $4,000, $6,720 and $451,
respectively.
</FN>
</TABLE>
<PAGE> 7
The following two tables set forth certain information regarding options
granted and exercised under the Company's 1994 Stock Option Plan and 1995
Directors' Stock Option Plan during 1997 to each of the Named Executives.
<TABLE>
INDIVIDUAL OPTION GRANTS IN FISCAL YEAR 1997
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO
GRANTED EMPLOYEES EXERCISE
NAME (#) <F1> IN 1997 <F2> PRICE ($/SH)
- ------------------------- ------------ -------------- -------------
<S> <C> <C> <C>
A. James Dearlove 40,000 16% $21.875
200 <F4> $23.375
Steven W. Tholen 40,000 16% $21.875
Keith D. Horton 30,000 12% $21.875
David R. Barker 30,000 12% $21.875
<CAPTION>
GRANT DATE
PRESENT
NAME EXPIRATION DATE VALUE <F3>
- ------------------------- ------------------ --------------
<S> <C> <C>
A. James Dearlove January 28, 2007 $295,600
January 01, 2007 $ 1,478
Steven W. Tholen January 28, 2007 $295,600
Keith D. Horton January 28, 2007 $221,700
David R. Barker January 28, 2007 $221,700
<F1> Reflects the Company's two-for-one stock split effective as of August
15, 1997.
<F2> Options to purchase a total of 250,000 shares of Common Stock were
granted to employees during the Company's fiscal year ended December 31,
1997.
<F3> The Black-Scholes model was used to determine the grant date present
value of the stock options. This method requires the use of certain
assumptions that affect the value of the options. The assumptions used in
this model are the volatility of the Company's stock price, an estimate of
the risk-free interest rate and expected dividend yield. For purposes of this
model, a volatility factor of 36.77%, a 6.63% risk-free interest rate and a
4.11% expected dividend rate were used. No adjustments were made for non-
transferability or for risk of forfeiture of the stock options. This model
assumes all of the options are exercised by the tenth year. There is no
assurance that these assumptions will prove true in the future. The actual
value of the options depends on the market price of the Common Stock at the
date of exercise, which may vary from the theoretical value indicated in the
table.
<F4> These options were granted under the 1995 Directors' Stock Option Plan
and were, therefore, not included in the calculation of percent of total
options granted to employees.
</FN>
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR-END OPTION VALUES <F1>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY-OPTIONS
OPTIONS AT YEAR-END AT YEAR-END <F2>
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
A. James Dearlove 197,400 400,200 $2,394,640 $306,225
Steven W. Tholen 90,000 40,000 $1,163,090 $305,000
Keith D. Horton 72,000 30,000 $ 920,785 $228,750
David R. Barker 40,000 30,000 $ 509,980 $228,750
<F1> No Named Executive exercised any stock options in 1997.
<F2> Values are calculated by multiplying the amount by which the market
value per share of the Company's Common Stock exceeded the option exercise
price per share at December 31, 1997 times the number of shares underlying
the option.
</FN>
</TABLE>
<PAGE> 8
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Under the Company's severance policy, all officers whose employment is
terminated following a change in control (as defined in the policy) of the
Company will receive certain payments according to a formula based on the
officer's salary, length of service with the Company and age. The maximum
amount payable to an officer under the policy is 250 percent of such
officer's then-current annual salary. The following table indicates amounts
payable to the Named Executives upon a change of control as of March 31,
1998.
<TABLE>
<CAPTION>
NUMBER OF MONTHS AMOUNTS PAYABLE
---------------- ---------------
<S> <C> <C>
A. James Dearlove............ 22.500 $506,250
Steven W. Tholen............. 13.125 $185,942
Keith D. Horton.............. 18.750 $218,756
David R. Barker.............. 13.125 $153,130
COMPENSATION AND BENEFITS COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
POLICIES APPLICABLE TO EXECUTIVE OFFICERS. The Committee has designed
executive compensation policies which it believes are conducive to the
Company's providing levels of compensation competitive with those of industry
peers of comparable size. The compensation paid to executive officers,
including the Chief Executive Officer, reflects rewards for individual
contributions toward achievement of the Company's annual and long-term
performance goals, the Company's above-average corporate performance compared
with industry peer groups and individual contributions to the day-to-day
operations of the management team. Executive Officers are paid a combination
of base salary, stock options and cash bonus awards.
Base salaries are reviewed by the Committee annually and are based on
subjective evaluations of each individual officer's performance and the
Company's performance. The Committee assigns significant weight to the
evaluations made by Mr. Dearlove concerning the other Named Executives.
The Committee grants stock options to executive officers and other
employees as a means of providing long-term incentive to the Company's
employees. The Committee believes the granting of stock options encourages
increased performance by the Company's employees, including its officers, and
aligns the interests of the Company's employees with those of its
shareholders. Decisions concerning the granting of stock options are made on
the same basis as decisions concerning base salary as discussed in the
previous paragraph.
To ensure the Company's compensation policies are competitive with those
of its peers and to maximize the Company's ability to retain qualified
executive officers, the Committee also considers on an annual basis whether
to pay cash bonuses to some or all employees, including the Named Executives.
CHIEF EXECUTIVE OFFICER COMPENSATION. When determining Mr. Dearlove's
1997 compensation as reflected in the executive compensation table contained
herein, the Committee considered, among others, the following factors:
- Compensation paid to Chief Executive Officers of other comparably
sized companies, particularly those in the energy production industry.
- Listing of the Company's Common Stock for trading on the New York
Stock Exchange.
- Establishment of a five-year plan for the Company's performance and
growth.
- Successful acquisition of certain coal properties.
- Addition to the Board of Directors of three new members possessing
expertise in the financial and/or energy industries.
<PAGE> 9
- Successful consummation of the sale by Interkohle of 20 percent of the
Company's outstanding Common Stock to a diversified group of
shareholders including several financial institutions and mutual funds
as well as the Company's management and directors.
- Effectuation of a two-for-one split of the Company's Common Stock.
- The Company's achievement of the highest annual operating income in
its history.
- Successful continued development of and diversification of lessees on
properties which, until May 1996, had been leased principally to a
single lessee.
COMPENSATION AND BENEFITS COMMITTEE
Robert Garrett
John A. H. Shober
Frederick C. Witsell, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Benefits Committee is composed entirely of outside
directors.
In 1997, the Company paid approximately $70,000 to Robert Garrett & Sons
Inc., of which Mr. Garrett serves as President, for consulting services.
These services were terminated upon Mr. Garrett's appointment to the Board.
<PAGE> 10
PERFORMANCE GRAPH
The following graph compares Penn Virginia's five-year cumulative total
shareholder return (assuming reinvestment of dividends) with the cumulative
total return of the Standard & Poor's Exploration & Production Index, the
Standard & Poor's Industrials Index and the Dow Jones Coal Index. The graph
assumes $100 is invested on January 1, 1993 in Penn Virginia Corporation and
each index at December 31, 1992 closing prices.
</TABLE>
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
PENN VIRGINIA, S&P EXPLORATION & PRODUCTION INDEX,
S&P INDUSTRIALS INDEX AND DOW JONES COAL INDEX
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Penn Virginia Corporation 100 117 103 112 170 222
S&P Exploration &
Production Index 100 97 77 91 120 110
Dow Jones Coal Index 100 145 138 142 151 126
S&P Industrials Index 100 109 113 151 188 243
</TABLE>
There are six companies in the Standard & Poor's Exploration &
Production Index: Anadarko Petroleum, Burlington Resources, Inc., Kerr-McGee
Corp., Apache Corp., Oryx Energy Co. and Union Pacific Resources Group Inc.
The Dow Jones Coal Index includes Pittston Minerals Group, Ziegler Coal
Holding Company and the Company.
<PAGE> 11
EMPLOYEES' RETIREMENT PLAN
As of June 30, 1996, the Company froze benefits under its
noncontributory defined benefit pension plan at which time each participating
employee was granted a nonforfeitable right to 100 percent of his accrued
benefit. In general, the pension plan provides for payment of annual
retirement benefits to eligible employees who retire at age 65. The amount of
the pension payment is based on a career average benefit formula, which takes
into account years of service and annual earnings of the employee. The
pension plan is designed to provide a retirement income which, when combined
with benefits from the Company's defined contribution plans and Social
Security, should allow the long-term employee to maintain after retirement
his standard of living at the time of retirement. The pension plan also
provides for deferred retirement benefits for disabled employees, reduced
benefits for early retirement and additional accruals for years of service
beyond age 65 prior to June 30, 1996.
The following table shows the estimated annual pension benefits payable
to employees of the Company, including the Named Executives, 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 age 65. Benefit amounts set forth in the table are not presently
subject to any deduction for Social Security benefits or other offset
amounts.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
YEARS OF SERVICE
ANNUAL ---------------------------------------
COMPENSATION 15 20 25
- ------------------ ------- ------- -------
<S> <C> <C> <C>
$125,000 $24,375 $32,500 $40,625
$150,000 $29,250 $39,000 $48,750
$175,000 <F1> $31,200 $41,600 $52,000
$200,000 <F1> $31,200 $41,600 $52,000
$225,000 <F1> $31,200 $41,600 $52,000
$250,000 <F1> $31,200 $41,600 $52,000
$275,000 <F1> $31,200 $41,600 $52,000
<F1> Beginning in 1989, the Internal Revenue Code ("IRC") restricted the
amount of annual compensation which may be considered in the computation of
benefits payable from a qualified pension plan. The 1996 compensation limit
was $150,000. Benefit accruals ceased as of June 30, 1996.
</FN>
</TABLE>
Separate IRC Section 415 restrictions limit the annual benefit payable
to $125,000 in 1997.
Credited years of service under the pension plan for Messrs. Dearlove,
Tholen, Horton, and Barker are 19, 1, 16, and 1, respectively.
<PAGE> 12
MISCELLANEOUS
INDEPENDENT ACCOUNTANTS
Upon recommendation of the Audit Committee, the Company has reappointed
Arthur Andersen LLP ("Arthur Andersen") as the independent accounting firm to
audit the Company's financial statements for the fiscal year ending December
31, 1998. Representatives of Arthur Andersen will be present at the Annual
Meeting. They will be given the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
Arthur Andersen was originally appointed as the Company's independent
accounting firm following the dismissal of KPMG Peat Marwick LLP ("KPMG") in
August 1996, which dismissal was approved by the Audit Committee. Neither
KPMG nor Arthur Andersen has, during either of the Company's past two fiscal
years ended December 31, 1997 or December 31, 1996 issued a report on the
financial statements for such years which contained an adverse opinion,
disclaimer of opinion, modification or qualification. At no time during the
Company's fiscal years ended December 31, 1997 or December 31, 1996 did the
Company and KPMG disagree on any matter or accounting principles and
practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to KPMG's satisfaction, would have caused KPMG to make
reference to the subject matter of the disagreement in its report.
OTHER MATTERS
The Board of Directors knows of no matters which are to be presented for
consideration at the Annual Meeting other than those specifically described
in the Notice of Annual Meeting. If any other matters properly come before
the Annual Meeting, however, it is the intention of the persons designated as
proxies to vote on them in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any proposal submitted by shareholders for inclusion in the Company's
proxy statement and proxy for the 1999 Annual Meeting of Shareholders of the
Company must be received by the Company at its corporate offices in Radnor,
Pennsylvania on or before November 27, 1998, and must comply in all other
respects with the Company's Bylaws and applicable rules and regulations of
the SEC relating to such inclusion.
ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report on Form 10-K (without exhibits) as
filed with the SEC will be furnished without charge upon written request of
any shareholder of record. Requests for this report should be directed to
Nancy M. Snyder, Corporate Secretary, Penn Virginia Corporation, One Radnor
Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087.
By Order of the Board of Directors
/S/ NANCY M. SNYDER
---------------------------
Nancy M. Snyder
Corporate Secretary
March 27, 1998
<PAGE> 13
VOTING CARD
PENN VIRGINIA CORPORATION
One Radnor Corporate Center
Suite 200, 100 Matsonford Road
Radnor, Pennsylvania 19087
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints A. James Dearlove, Steven W. Tholen and
Nancy M. Snyder as Proxies, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and vote, as designated
below, all shares of Common Stock of Penn Virginia Corporation (the
"Company") held of record by the undersigned on March 6, 1998, at the Annual
Meeting of Shareholders to be held on May 5, 1998 or any adjournment thereof.
(To Be Completed and Signed on Reverse Side.)
A [X] Please mark your votes as in this example using dark ink only.
WITHHOLD
1. ELECTION OF FOR AUTHORITY
DIRECTORS [ ] [ ] Nominees: Richard A. Bachmann
Lennox K. Black
John D. Cadigan
A. James Dearlove
Robert Garrett
Joe T. Rye
John A. H. Shober
Frederick C. Witsell, Jr.
WITHHELD FOR: (Write that nominee's name
in the space provided below.)
- ----------------------------------------
____________________________________ Date _____________, 1998,
SIGNATURE
____________________________________ Date _____________, 1998
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian give full title. If a corporation, sign in
full corporate name by President or other authorized officer. If a
partnership, sign in partnership name by authorized person.
