<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Plains Petroleum Company
- - - - - - --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (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
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>
-------------------
LOGO
-------------------
- - - - - - --------------------------------------------------------------------------------
12596 West Bayaud Avenue, Suite 400, Lakewood, Colorado 80228 / / (303)
969-9325
Preliminary Copies
March 10, 1995
Fellow Shareholder:
You are cordially invited to attend the tenth Annual Meeting of Shareholders
to be held at the Ricketson Auditorium, the Denver Museum of Natural History,
2001 Colorado Boulevard, Denver, Colorado, on Thursday, April 13, 1995, at 10:30
a.m. Mountain Time. At the meeting, the shareholders will be asked to reelect
two directors for a term of three years. The accompanying Notice of Annual
Meeting and Proxy Statement identify the nominees selected by the Board of
Directors.
Your vote is important. Accordingly, to be sure that your shares will be
voted, whether or not you plan to attend the meeting in person, please sign,
date and mail the accompanying WHITE Proxy Card in the enclosed return envelope
promptly. If you then do attend the meeting, your WHITE Proxy Card will be
returned to you if you wish to vote in person.
Very truly yours,
James A. Miller,
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
<PAGE>
-------------------
LOGO
-------------------
- - - - - - --------------------------------------------------------------------------------
12596 West Bayaud Avenue, Suite 400, Lakewood, Colorado 80228 / / (303)
969-9325
Preliminary Copies
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- - - - - - --------------------------------------------------------------------------------
The Annual Meeting of Shareholders of Plains Petroleum Company will be held at
the Ricketson Auditorium, the Denver Museum of Natural History, 2001 Colorado
Boulevard, Denver, Colorado, on Thursday, April 13, 1995, at 10:30 a.m. Mountain
Time for the purpose of reelecting two directors for a term of three years and
to transact such other business as may properly come before the meeting.
Accompanying this Notice of Annual Meeting is a WHITE Proxy Card, a Proxy
Statement and the Company's 1994 Annual Report to Shareholders. Only
shareholders of record at the close of business on March 2, 1995 are entitled to
vote at the meeting. A complete list of shareholders will be open for
examination by any shareholder for any purpose germane to the meeting at the
offices of the Company at 12596 West Bayaud Avenue, Suite 400, Lakewood,
Colorado, during ordinary business hours, for a period of 10 days prior to the
meeting.
Shareholders are requested to date and sign the enclosed WHITE Proxy Card and
mail it in the enclosed envelope, which does not require postage if mailed
within the United States.
IMPORTANT
- - - - - - --------------------------------------------------------------------------------
PLEASE MARK AND DATE THE WHITE PROXY CARD AND SIGN EXACTLY AS YOUR NAME OR NAMES
APPEAR THEREON. IF STOCK IS HELD JOINTLY, ALL JOINT OWNERS SHOULD SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS, CUSTODIANS, CORPORATE OFFICERS
AND OTHERS SIGNING IN A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
- - - - - - --------------------------------------------------------------------------------
By Order of the Board of Directors
Eugene A. Lang, Jr.
SECRETARY
Lakewood, Colorado
March 10, 1995
<PAGE>
- - - - - - --------------------------------------------------------------------------------
12596 West Bayaud Avenue, Suite 400, Lakewood, Colorado 80228 / / (303)
969-9325
Preliminary Copies
March 10, 1995
PROXY STATEMENT
- - - - - - --------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
- - - - - - --------------------------------------------------------------------------------
This Proxy Statement, which is first being mailed to shareholders on or about
March 10, 1995, is furnished in connection with the solicitation by the Board of
Directors of Plains Petroleum Company (the "Company") of Proxies for use at the
Annual Meeting of Shareholders of the Company to be held on April 13, 1995 at
the time and place set forth in the attached Notice of Annual Meeting and at any
adjournments or postponements of such meeting. A shareholder who has executed a
WHITE Proxy Card may revoke it at any time before it is voted by filing with the
Secretary of the Company an instrument revoking it or a duly executed WHITE
Proxy Card bearing a later date or by appearing at the Annual Meeting of
Shareholders and voting in person. Each WHITE Proxy Card which is properly
signed, dated and not revoked will be voted in accordance with the instructions
contained therein. If no instructions are given, the WHITE Proxy Card will be
voted FOR the reelection of William W. Grant, III and Charles E. Wright as Class
I Directors and in the discretion of the persons named in the WHITE Proxy Card
on such other matters as may properly come before the meeting.
RECORD DATE; SHARES OUTSTANDING
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The Board of Directors has fixed March 2, 1995 as the record date for the Annual
Meeting of Shareholders. On March 2, 1995, the Company had outstanding
approximately [9,815,826] shares of Common Stock. Each share has one vote. Only
shareholders of record at the close of business on March 2, 1995 are entitled to
vote at the meeting. The presence, in person or by proxy, of at least a majority
of the shares of Common Stock outstanding on the record date will constitute a
quorum at the Annual Meeting of Shareholders.
ELECTION OF DIRECTORS
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The Restated Certificate of Incorporation of the Company provides for a Board of
Directors of no fewer than five nor more than eleven members, divided into three
classes, with the exact number to be specified in the By-laws of the Company.
The classes have staggered terms of office, so that the terms of office of
directors of only one class expire at each Annual Meeting of Shareholders of the
Company and the directors of that class are elected for three year terms at such
meeting. The By-laws currently authorize six positions on the Board of
Directors. The terms of the current Class I directors expire at the 1995 Annual
Meeting of Shareholders. At the 1995 Annual Meeting of Shareholders, two Class I
directors will be elected for three year terms expiring at the 1998 Annual
Meeting of Shareholders.
The Board of Directors has nominated William W. Grant, III and Charles E. Wright
for reelection as Class I directors. The election of each director requires the
affirmative vote of the holders of a majority of the shares of Common Stock of
the Company that are represented in person or by proxy and entitled to vote at
the meeting, assuming a quorum is present. Mr. Grant is an Advisory Director of
Colorado National Bankshares, Inc. and Colorado National Bank. Mr. Wright is an
attorney in private practice in Lincoln, Nebraska. For further information
concerning William W. Grant, III and Charles E. Wright, see "Nominees and
Directors of the Company."
<PAGE>
Proxies will be voted, unless authority to vote is withheld by the shareholder,
for the election of William W. Grant, III and Charles E. Wright to serve as
directors until the 1998 Annual Meeting of Shareholders and until the election
and qualification of their successors; provided, that if either or both of the
nominees shall be unable or shall fail to accept reelection by virtue of an
unexpected occurrence, Proxies may be voted for such other person or persons as
shall be determined by the holders of Proxies in their discretion.
On February 10, 1995, the Company received from WTW Properties, Inc., a newly
formed and wholly owned subsidiary of Cross Timbers Oil Company ("Cross
Timbers"), a notice stating that WTW Properties, Inc. intends to nominate two
officers and directors of Cross Timbers for election as Class I directors at the
Annual Meeting of Shareholders.
NOMINEES AND DIRECTORS OF THE COMPANY
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The following table provides certain information regarding the nominees for
election as directors and the current directors whose terms will continue after
the Annual Meeting:
<TABLE>
<CAPTION>
YEAR FIRST OTHER BUSINESS EXPERIENCE DURING
ELECTED AS POSITIONS HELD WITH PAST 5 YEARS; OTHER
DIRECTOR AGE THE COMPANY DIRECTORSHIPS
<S> <C> <C> <C> <C>
- - - - - - -----------------------------------------------------------------------------------------------------
NOMINEES FOR ELECTION FOR TERMS OF THREE YEARS EXPIRING IN 1998 (CLASS I)
- - - - - - -----------------------------------------------------------------------------------------------------
WILLIAM W. 1987 62 Director Advisory Director of Colorado
GRANT, III National Bankshares, Inc. and
Colorado National Bank since
1993. Director of Colorado
National Bankshares, Inc. from
1982 through 1993, and Chairman
of the Board of Colorado
National Bank, Denver, Colorado
from 1986 through 1993. Chairman
of the Board of Colorado Capital
Advisors from 1989 through 1994.
CHARLES E. 1992 62 Director Attorney at Law in private
WRIGHT practice in Lincoln, Nebraska,
since 1959. Director of FirsTier
Bank, N.A., Lincoln, Nebraska,
since 1990.
- - - - - - -----------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1996 (CLASS II)
- - - - - - -----------------------------------------------------------------------------------------------------
DERRILL CODY 1990 56 Director Attorney at Law in private
practice in Oklahoma City,
Oklahoma, since January 1990.
Director of the General Partner
of TEPPCO Partners, L.P. since
January 1990. Vice President of
Texas Eastern Corporation from
1986 until December 1989. Chief
Executive Officer of Texas
Eastern Pipeline Company from
1987 to 1989.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST OTHER BUSINESS EXPERIENCE DURING
ELECTED AS POSITIONS HELD WITH PAST 5 YEARS; OTHER
DIRECTOR AGE THE COMPANY DIRECTORSHIPS
- - - - - - -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WILLIAM F. 1994 55 Director. President Regional Vice President of
WALLACE and Chief Operating Texaco Exploration and
Officer of Plains Production, Inc., New Orleans,
Petroleum Operating Louisiana, from 1988 to 1994.
Company, the
Company's operating
subsidiary.
- - - - - - -----------------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1997 (CLASS III)
- - - - - - -----------------------------------------------------------------------------------------------------
HARRY S. WELCH 1986 71 Director Attorney at Law in private
practice in Houston, Texas, from
August 1989 to present. Served
as Vice President and General
Counsel of Texas Eastern
Corporation from 1988 through
July 1989.
JAMES A. MILLER 1988 60 Director. Chairman
and Chief Executive
Officer.
</TABLE>
DIRECTORS AND COMMITTEE MEETINGS
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The Board of Directors met ten times during 1994. Each director attended, in
person or by telephone, every meeting of the Board of Directors and of the
committees of the Board on which he serves.
In addition to the Executive Committee (currently consisting of Messrs. Miller
and Wallace), which may exercise, during intervals between meetings of the Board
of Directors, most of the powers of the Board in the management and direction of
the business and affairs of the Company, there are two other standing committees
of the Board of Directors: the Audit Committee and the Compensation Committee.
Messrs. Cody, Grant, Welch and Wright are the current members of each of those
committees.
The Audit Committee met once during 1994. The duties of the Audit Committee
include recommendation of the independent auditors for selection by the Board of
Directors, review of the arrangements and scope of the independent auditors'
examination, review of the findings and recommendations of the independent
auditors concerning internal accounting procedures and controls, review of
professional services rendered by the independent auditors and review of the
independence of the auditors in regard to the Company and its management.
The Compensation Committee met four times during 1994. The duties of the
Compensation Committee are described below in the Report of the Compensation
Committee.
The Board of Directors does not presently have a separate nominating committee
and develops nominations as a whole. Pursuant to the Company's Restated
Certificate of Incorporation, in general, shareholders may nominate candidates
for the Board of Directors by giving actual written notice to the Company's
Secretary at its principal executive offices of the name of each such candidate
and by furnishing other required information at least 90 days before the Annual
Meeting of Shareholders at which such election will be held or at least
3
<PAGE>
90 days before the anniversary date of the immediately preceding Annual Meeting
of Shareholders, whichever date is later. A copy of the applicable Restated
Certificate of Incorporation provisions may be obtained, without charge, upon
written request to the Company's Secretary at the address set forth on page one
of this Proxy Statement.
RELATIONSHIP BETWEEN CERTAIN DIRECTORS AND THE COMPANY
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The Company had a loan commitment through February 17, 1995 from three banks,
one of which was Colorado National Bank ("CNB"), a wholly owned subsidiary of
Colorado National Bankshares, Inc. CNB's portion of the commitment was $9
million, and it received an annual commitment fee of approximately $17,978 in
1994. William W. Grant, III, a director of the Company, was Chairman of the
Board of CNB and a director of Colorado National Bankshares, Inc. through June
1993, and he now serves as an advisory director of CNB and Colorado National
Bankshares, Inc.
REPORT OF THE COMPENSATION COMMITTEE
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The Compensation Committee of the Board of Directors (the "Committee") consists
of Messrs. Cody, Grant, Welch and Wright. None of the members of the Committee
was, in 1994 or previously, an officer or employee of the Company. The Committee
evaluates the performance of management and establishes the compensation
received by management, including the award of bonuses under the incentive
compensation plan. The Committee's duties also include the administration of all
of the Company's stock option plans, except the 1985 Stock Option Plan for
Non-employee Directors in which Committee members participate.
In addition, the Committee considers succession planning and related matters. In
this connection, the Committee actively participated in the process that led to
the selection of William F. Wallace, who succeeded Robert M. Danos as President
and Chief Operating Officer of Plains Petroleum Operating Company on October 3,
1994.
Two principles underlie the Committee's compensation actions: (a) compensation
should be competitive with compensation offered at comparable independent oil
and gas companies so as to enable the Company to attract and retain qualified
executives and managers; and (b) compensation should in part create incentives
that motivate executives to achieve largely quantifiable goals that are aligned
with the shareholders' interests. Because none of the five most highly paid
executives received compensation exceeding $1 million in 1994 (and, in the
opinion of the Committee, none is likely to receive such in the foreseeable
future), the Committee has not formulated any policies with respect to the
provision of the Internal Revenue Code relating to the deductibility of
individual compensation exceeding that amount.
COMPETITIVE COMPENSATION. Since May 1992, William M. Mercer, Incorporated
("Mercer"), a nationally recognized compensation consulting firm, has been
retained by the Committee to evaluate the competitiveness of the Company's
executive compensation. Mercer has developed and updates for the Committee an
appropriate "peer group" of publicly-held, independent oil and gas exploration
and production companies with generally comparable revenues. This "peer group"
does not include the entities which make up the Dow Jones Oil-Secondary Total
Return Index, the index used in the Company's performance graph. The Committee
believes the Company must compete with the "peer group" companies identified by
Mercer to attract and retain qualified executives and managers. Mercer compares
the compensation of each of the Company's officers with that received by
officers in comparable positions with "peer group" members.
In an October 1993 report to the Committee, Mercer concluded that the base
salaries paid to the Company's officers were generally competitive with salaries
paid to "peer group" officers in the prior year. While salary adjustments in
1994 would have been warranted to maintain this competitiveness, James A.
Miller, the
4
<PAGE>
Company's Chief Executive Officer, recommended that no officer or employee
receive a 1994 salary increase in light of 1993 operating results, which were
impacted by the low oil prices that persisted through the end of 1993 and into
the first quarter of 1994. At its February 1994 meeting, the Committee approved
such recommendation.
INCENTIVE COMPENSATION. In its original report to the Committee, Mercer
concluded that, while officer base salaries were in-line with the "peer group,"
total cash compensation was non-competitive because the Company did not have a
bonus program. Based on such finding, in February 1993, the Committee adopted an
incentive compensation plan that was intended to further motivate officers to
achieve largely quantifiable objectives that are aligned with the shareholders'
interests. Specifically, the plan provided that an officer was eligible to
receive a bonus only if the Company achieved at least a 10 percent return on
equity ("ROE") in a calendar year. If the ROE requirement were met, the maximum
bonus an officer could receive was equal to 30 percent of his salary. The amount
of the bonus paid was tied to the achievement of reserve replacement, earnings
and personal performance objectives for each calendar or service year to be
established each year by the Committee. In connection with the adoption of the
plan, the Committee approved an amendment to the Company's Profit Sharing Plan
and Trust, which amendment made officers ineligible to receive profit sharing
contributions.
At its February 16, 1995 meeting the Committee determined that no officer was
eligible for a bonus for 1994 service because the 10 percent ROE requirement was
not met in that year. However, upon the recommendation of the Company's senior
officers, certain officers, including Messrs. VanRamshorst and Lang, were
awarded bonuses in recognition of their efforts in 1994, particularly with
respect to the Company's 1994 reserve growth. These bonuses ranged from $4,000
to $20,000.
During 1994, the Committee discussed the appropriateness of the 10 percent ROE
threshold in the plan and the weight given in the plan to earnings. These
discussions were based on the concern that, even in years in which the Company
successfully increased its reserves, cash flow and production potential at
favorable costs, officers may not receive incentive compensation. Moreover, the
Board encouraged the officers to seek exploration opportunities. Because the
Company uses successful efforts accounting, unsuccessful exploratory drilling
expenses are immediately expensed.
In light of these discussions, the Committee requested Mercer to study the
thresholds, if any, that officers at "peer group" companies must achieve in
order to receive incentive compensation. Generally, Mercer found that no "peer
group" company with an incentive compensation plan had a ROE threshold, nor did
it find that others weighted earnings as did the Company.
Based on the Committee's prior discussions and Mercer's findings, at its
February 1995 meeting the Committee approved amendments to the incentive
compensation plan effective January 1, 1995. As amended, the 10 percent ROE was
eliminated. The plan now provides that half of the bonus opportunity is to be
based on the achievement of corporate performance targets to be established each
year (the 1995 targets for reserve growth, finding and development costs, cash
flow and earnings were also set at such meeting). The other half of the bonus
opportunity is based on the achievement of individual performance targets which
are tied to the Company's personal and professional performance evaluations.
Under the amended plan, the Company's two most senior officers, Messrs. Miller
and Wallace, are eligible to receive a bonus equal to 80 percent of their
salaries in the event all of the maximum targets established by the Committee
are met or exceeded. The maximum bonus Messrs. VanRamshorst and Lang may receive
is equal to 60 percent of their salaries, and the maximum bonus Mr. Wagner may
receive is equal to 40 percent of his salary.
STOCK OPTIONS. The Company has historically awarded stock options to virtually
all of its employees. It is the Committee's view that such broad-based
participation in stock option plans encourages personal commitment since
essentially all employees benefit from the Company's long-term performance. The
number of shares granted to an individual is based upon the person's relative
responsibilities and the results
5
<PAGE>
of his or her personal performance evaluation. Prior to 1994, the maximum number
of option shares granted to an officer was that number of whole shares obtained
by dividing $100,000 (the maximum amount under the Internal Revenue Code
qualifying for the incentive stock option treatment) divided by the average of
the high and low trading prices on the New York Stock Exchange of the Company's
stock on the date the option was granted.
At the Committee's request, Mercer studied the competitiveness of the Company's
stock option grants to officers. Mercer concluded that the Company's stock
option grants were significantly below competitive averages. Also, Mercer
reported that "peer group" companies typically grant stock options based upon a
multiple of salary. In addition, while conducting the process that led to the
selection of Mr. Wallace, the Committee concluded the Company needed to grant a
greater number of stock options, including stock options not qualifying for
incentive stock option treatment, in order to be competitive.
Based on the foregoing, the Committee modified the manner in which it granted
stock options to officers. Specifically, the Committee adopted Mercer's
recommendation and determined that stock options should be calculated using a
multiple of an officer's salary. The product of such multiplication was then to
be divided by the fair market value of the Company's stock on the day the option
is awarded. So that such options would be deemed qualified options, the
Committee determined that the maximum value of option shares first exercisable
in a calendar year would not exceed $100,000. Using this approach, the Committee
approved officer stock options at its April 1994 meeting. Based upon a
multiplication of Mr. Miller's annual salary by 1.2 (which multiple was within
the range recommended by Mercer), Mr. Miller received an option for 12,843
shares at an exercise price of $20.6875 per share. Of the shares awarded to Mr.
Miller, 4,833 were immediately exercisable, 4,833 became exercisable on January
1, 1995, and 3,177 will become exercisable on January 1, 1996. In addition, Mr.
Lang was awarded a "non-qualified" option for 18,000 shares at an exercise price
of $22.1875 per share in light of a promotion he received.
Derrill Cody William W. Grant, III
Harry S. Welch, Chairman Charles E. Wright
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
- - - - - - --------------------------------------------------------------------------------
The table below provides compensation information for the Company's chief
executive officer and the Company's four most highly compensated executive
officers, other than the chief executive officer, who were serving as executive
officers at the end of 1994 and whose total annual salary and bonus exceeded
$100,000.
- - - - - - --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- - - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION(2)
ANNUAL COMPENSATION(1) -----------------
SECURITIES
------------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(3) BONUS(4) OPTIONS/SARS (#) COMPENSATION(5)
<S> <C> <C> <C> <C> <C>
- - - - - - --------------------------------------------------------------------------------------------------------
James A. Miller 1994 $ 221,448 0 12,843 $ 1,500
Chairman and 1993 221,448 0 0 539
Chief Executive Officer 1992 215,541 0 3,712 21,321
Robert M. Danos(6) 1994 200,856 0 4,833 1,500
President of 1993 200,856 0 0 539
Plains Petroleum 1992 195,488 0 3,712 20,896
Operating Company
Lee B. VanRamshorst 1994 135,960 $ 20,000 7,228 1,500
Senior Vice President- 1993 135,960 0 0 539
Business Development of 1992 132,330 0 3,712 14,356
Plains Petroleum
Operating Company
Eugene A. Lang, Jr. 1994 127,560 8,000 25,460 1,500
Senior Vice President, 1993 127,560 0 0 539
General Counsel and 1992 124,150 0 3,712 13,501
Secretary
Robert W. Wagner 1994 117,120 0 6,283 1,500
Vice President 1993 117,120 0 0 539
Land & Marketing of 1992 113,985 0 2,500 11,271
Plains Petroleum
Operating Company
- - - - - - --------------------------------------------------------------------------------------------------------
<FN>
(1) No named executive officer received perquisites and other personal benefits
in excess of the lesser of $50,000 or ten percent of his salary, as
reported in this table.
(2) The Company did not make restricted stock awards or payouts under long term
incentive plans in 1994, 1993 or 1992.
(3) Includes cash compensation deferred at the election of the named executive
officers under the Company's 401(k) Plan and Trust and the Company's
Executive Deferred Compensation Plan.
(4) The bonus figures reflect amounts paid in 1995 for services performed in
1994.
(5) The amounts disclosed in this column for 1994 represent the Company's
matching contribution, paid in Company Common Stock, under the 401(k) Plan
and Trust. The amounts disclosed in this column for 1993 represent the
Company's contributions to the Company's Payroll-Based Tax Credit Employee
Stock Ownership Plan, which plan was terminated on January 1, 1994. The
amounts disclosed in this column for 1992 include the following:
(a) the Company's contributions to the Company's Profit Sharing Plan and
Trust on behalf of Messrs. Miller ($20,789), Danos ($20,364),
VanRamshorst ($13,824), Lang ($12,969) and Wagner ($10,739), and
(b) the Company's contributions to the Company's Payroll-Based Tax Credit
Employee Stock Ownership Plan on behalf of Messrs. Miller ($532),
Danos ($532), VanRamshorst ($532), Lang ($532) and Wagner ($532).
As discussed in the Report of the Compensation Committee, effective January
1, 1993, officers no longer participate in the Company's Profit Sharing
Plan and Trust.
(6) From October 3, 1994 through January 3, 1995, Mr. Danos served as President
of Plains Petroleum Company. Mr. Danos retired on January 3, 1995. William
F. Wallace became a director of the Company and President of Plains
Petroleum Operating Company on October 3, 1994.
</TABLE>
7
<PAGE>
The table below provides information on the grants of stock options to the named
executive officers during 1994.(1)
- - - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER VALUE AT ASSUMED
OF PERCENT ANNUAL RATES OF
SECURITIES OF TOTAL STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION
OPTIONS/SARS GRANTED TO OR BASE FOR OPTION TERM
GRANTED EMPLOYEES PRICE EXPIRATION ----------------------
NAME (#) IN 1994 ($/SHARE) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
- - - - - - --------------------------------------------------------------------------------------------------------------------
James A. Miller 12,843 6.4% 20.6875 4/12/04 $ 167,091 $ 423,441
Robert M. Danos 4,833 2.4 20.6875 4/03/95(2) 62,879 159,451
Lee B. VanRamshorst 7,228 3.6 20.6875 4/12/04 94,038 238,311
Eugene A. Lang, Jr. 7,460 3.7 20.6875 4/12/04 97,056 245,960
18,000 9.0 22.1875 9/08/04 251,165 636,501
Robert W. Wagner 6,283 3.1 20.6875 4/12/04 81,743 207,154
- - - - - - --------------------------------------------------------------------------------------------------------------------
<FN>
(1) Included in this table are 4,833 option shares for Mr. Miller, 2,395 shares
for Mr. VanRamshorst, 2,627 shares for Mr. Lang and 1,450 shares for Mr.
Wagner which were granted in 1994 but were first exercisable on January 1,
1995. Also included are 3,177 option shares granted to Mr. Miller in 1994
that are first exercisable on January 1, 1996. These 3,177 option shares
granted to Mr. Miller would become immediately exercisable upon certain
events constituting a change in control of the Company. The last reported
sales price of the Company's Common Stock on the New York Stock Exchange on
December 31, 1994 was $23.375 per share.
(2) Mr. Danos retired on January 3, 1995. Under the Company's employee option
plans, a retiree must exercise his or her options within three months of
retirement.
</TABLE>
The table below provides information on the value of the named executive
officers' unexercised options. No stock options were exercised by the named
individuals during 1994.
- - - - - - --------------------------------------------------------------------------------
OPTION VALUES AT DECEMBER 31, 1994(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT 12-31-94(1) AT 12-31-94(1)
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($)
<S> <C> <C>
- - - - - - ---------------------------------------------------------------------------------------------------------
James A. Miller 19,542/8,010 $12,989/21,527
Robert M. Danos 19,019/0 12,989/0
Lee B. VanRamshorst 33,169/2,395 65,720/6,437
Eugene A. Lang, Jr. 33,303/2,627 34,364/ 7,060
Robert W. Wagner 26,012/1,450 30,837/ 3,897
- - - - - - ---------------------------------------------------------------------------------------------------------
<FN>
(1) The last reported sales price of the Company's Common Stock on the New York
Stock Exchange on December 31, 1994 was $23.375 per share.
</TABLE>
8
<PAGE>
The following table shows the estimated annual benefits payable upon retirement
to Company employees under the Company's retirement plan and supplemental
retirement plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE
HIGH THREE ---------------------------------------------------------
YEAR AVERAGE 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
- - - - - - -----------------------------------------------------------------------
$ 125,000 $ 30,989 $ 41,319 $ 51,649 $ 61,978 $ 72,308
150,000 37,552 50,069 62,586 75,103 87,620
175,000 44,114 58,819 73,524 88,228 102,933
200,000 50,677 67,669 84,461 101,353 118,245
225,000 57,239 76,319 95,399 114,478 133,538
250,000 63,802 85,069 106,336 127,603 148,870
</TABLE>
Annual pension benefits under such plan at the normal retirement age of 65 are
equal to accrued annuity credits. The yearly retirement credit for each plan
year from September 13, 1985 until December 31, 1988 equaled 1.3 percent of the
first $8,400 of compensation and 2.1 percent of amounts in excess of $8,400. For
participants who complete a year of service after December 31, 1988, the credits
are equal to the greater of (a) the foregoing credits plus those based on 2.0
percent of total monthly compensation after January 1, 1989 or (b) credits based
upon 1.25 percent of average compensation during the three consecutive years
within the last ten years of employment when compensation was the highest, times
years of service, plus 0.50 percent of such average compensation that exceeds
the Social Security taxable wage base in effect for each year of service, times
years of service (not to exceed 35 years). For purposes of the pension plan,
compensation includes salary, overtime and special duty compensation and
excludes bonuses and commissions. For each of the named executive officers, the
compensation covered by the plan is the amount reported as such officer's salary
in the summary compensation table above. Benefits under the plan are paid
monthly after retirement for the life of the participant (straight-life annuity
amount). Benefits under the plan are not subject to the deduction for Social
Security benefits or other offset amounts. The named executive officers have
accrued the following years of service for funding of benefits under the plan:
Mr. Miller, 7 years; Mr. Danos, 16 years; Mr. VanRamshorst, 10 years; Mr. Lang,
15 years; and Mr. Wagner, 10 years. Mr. Danos retired on January 3, 1995. The
benefits illustrated in this table do not reflect Internal Revenue Code Sections
415 and 401(a) limitations to which the plan is subject. If payment of actual
retirement benefits is limited by such provisions, an amount equal to any
reduction in retirement benefits will be paid as supplemental benefits under the
Plains Petroleum Supplemental Retirement Plan.
EMPLOYMENT CONTRACTS
- - - - - - --------------------------------------------------------------------------------
Mr. Miller is a party to an agreement with the Company which provides, among
other things, that if, within three years after a "change in control" (as
defined in such agreement), Mr. Miller's employment with the Company is
involuntarily terminated or is terminated by Mr. Miller for "Good Reason," he is
to be paid promptly a cash amount equal to 299 percent of the higher of (a) his
then annual compensation (including salary, bonuses and incentive compensation)
or (b) the highest annual compensation (including salary, bonuses and incentive
compensation) paid or payable during any of the three calendar years ending with
the year of his termination. "Good Reason" is defined as a reduction in Mr.
Miller's compensation or employment responsibilities, a required relocation
outside the greater Denver, Colorado area or, generally, any conduct by the
Company which renders the executive unable to discharge his employment duties
effectively.
Messrs. VanRamshorst, Wagner and Lang are also parties to severance agreements
identical to the agreement with Mr. Miller, except that the agreements with
Messrs. VanRamshorst, Wagner and Lang provide for payment equal to two times the
then annual compensation or the highest annual compensation paid or payable
during either one of the two calendar years immediately preceding termination.
9
<PAGE>
COMPENSATION OF DIRECTORS
- - - - - - --------------------------------------------------------------------------------
Effective December 1, 1993, a director who is otherwise not employed by the
Company or its subsidiaries receives a retainer of $1,300 per month and a fee of
$900 per day of each Board or committee meeting attended. Directors who are
full-time employees of the Company or its subsidiary receive no additional
compensation for their services as directors. All directors, however, are
reimbursed for reasonable travel expenses incurred in attending all meetings.
Directors who are not also employees of the Company participate in the 1985
Stock Option Plan for Non-Employee Directors (the "Directors Plan"). Options
granted pursuant to the Directors Plan are not intended to qualify as incentive
stock options. Under the Directors Plan, each Director who is not a salaried
employee of the Company, within 30 days after election or re-election to the
Company's Board of Directors, will be granted options to purchase a number of
shares of Common Stock equal to 1,000 multiplied by the number of years in the
term to which he or she is elected. If any person is elected by the Board of
Directors to fill an unexpired term or vacancy on the Board of Directors, within
30 days of the election, such person will be granted options for a number of
shares equal to 1,000 multiplied by the number of twelve-month periods of the
director's term (rounded up for any fraction of a twelve-month period). In 1994,
Harry S. Welch received options to purchase 3,000 shares at the exercise price
of $21.00 per share.
10
<PAGE>
PERFORMANCE GRAPH
- - - - - - --------------------------------------------------------------------------------
The following Performance Graph compares the cumulative total shareholder return
on the Company's Common Stock for a five-year period (December 31, 1989 to
December 31, 1994) with the cumulative total return over the same period of the
Standard & Poor's 500 Stock Index and the companies comprising the Dow Jones
Oil-Secondary Total Return Index. The comparison assumes the reinvestment of
dividends. Calculation of the Dow Jones Oil-Secondary Total Return Index was
made on a market-capitalization weighted basis.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG PLAINS PETROLEUM
COMPANY, THE S&P 500 INDEX AND THE DOW JONES OIL - SECONDARY INDEX.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PLAINS PETROLEUM S&P 500 D J OIL - SECONDARY
<S> <C> <C> <C>
100 100 100
1990 78 97 83
1991 86 126 82
1992 75 136 82
1993 73 150 91
1994 72 152 88
</TABLE>
FINANCIAL STATEMENTS AND INDEPENDENT PUBLIC ACCOUNTANTS
- - - - - - --------------------------------------------------------------------------------
The enclosed 1994 Annual Report to Shareholders contains the consolidated
balance sheets of the Company as of December 31, 1994, 1993 and 1992, and
related consolidated statements of earnings, shareholders' equity and cash flows
for each of the three years ended December 31, 1994, 1993 and 1992, certified by
Arthur Andersen & Co., independent public accountants. The Board of Directors
has engaged Arthur Andersen & Co. to serve as the Company's independent
accountants for 1995. A representative of Arthur Andersen & Co. will be present
at the Annual Meeting of Shareholders, will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
- - - - - - --------------------------------------------------------------------------------
The following table sets forth, as of March 2, 1995, the beneficial ownership of
the Company's Common Stock by the Company's directors, each of the executive
officers listed in the Summary Compensation Chart and all executive officers and
directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME BENEFICIALLY OWNED(1) PERCENTAGE OF CLASS
<S> <C> <C>
- - - - - - ---------------------------------------------------------------------------------------
Derrill Cody 5,200 *
William W. Grant, III 15,500 *
Eugene A. Lang, Jr. 38,882(2) *
James A. Miller 38,056(3) *
Lee B. VanRamshorst 39,733(4) *
Robert W. Wagner 28,899(5) *
William F. Wallace 11,637(6) *
Harry S. Welch 9,000 *
Charles E. Wright 5,254(7) *
All executive officers and
directors as a group (12 persons) 265,728 [2.65%]
- - - - - - ---------------------------------------------------------------------------------------
<FN>
(1) For purposes of determining the numbers of shares beneficially owned by the
named individuals and by all executive officers and directors as a group,
with respect to any director or executive officer who held options to
purchase shares of the Company's Common Stock exercisable within 60 days of
March 2, 1995, it was assumed that such options had been exercised and the
shares issued were outstanding. The following number of shares representing
such unexercised options were added to the holdings of each of the
following directors and officers: Mr. Cody 5,000 shares; Mr. Grant 8,000
shares; Mr. Lang 35,932 shares; Mr. Miller 27,552 shares; Mr. VanRamshorst
35,564 shares; Mr. Wagner, 27,462; Mr. Wallace 11,428 shares; Mr. Welch
7,000 shares; Mr. Wright 3,000 shares; and all executive officers and
directors as a group 217,073 shares. The respective directors and executive
officers have sole voting power and sole investment power over all shares
reflected in the table and in this note, except as described in the notes
to this table.
(2) Includes 1,000 shares as to which Mr. Lang has shared investment power and
shared voting power and 1,950 shares as to which Mr. Lang has no investment
power and sole voting power.
(3) Includes 85 shares owned by Mr. Miller's wife individually or as custodian
for their child over which Mr. Miller disclaims beneficial ownership and
over which he has neither investment nor voting power, 1,000 shares as to
which Mr. Miller has shared investment power and shared voting power and
4,419 shares as to which Mr. Miller has no investment power and sole voting
power.
(4) Includes 200 shares owned by Mr. VanRamshorst's children over which Mr.
VanRamshorst disclaims beneficial ownership and over which he has neither
investment power nor voting power and 3,969 shares as to which Mr.
VanRamshorst has no investment power and sole voting power.
(5) Includes 300 shares as to which Mr. Wagner has shared investment power and
shared voting power and 992 shares as to which Mr. Wagner has no investment
power and sole voting power.
(6) Includes 209 shares as to which Mr. Wallace has no investment power and
sole voting power.
(7) Includes 254 shares owned by Mr. Wright's wife over which Mr. Wright
disclaims beneficial ownership and over which he has neither investment nor
voting power.
* Less than 1 percent of the outstanding shares of Common Stock.
</TABLE>
12
<PAGE>
According to publicly available information, as of March 2, 1995, the only
entities that owned more than 5 percent of the outstanding shares of Common
Stock of the Company were as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENTAGE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
<S> <C> <C>
- - - - - - ------------------------------------------------------------------------------------
State Farm Mutual Automobile Insurance Company 711,410 [7.25%]
and related entity (1)
One State Farm Plaza
Bloomington, Illinois 61710
Cross Timbers Oil Company and related entity 644,500 [6.57%]
(2)
810 Houston Street, Suite 2000
Fort Worth, Texas 76102
- - - - - - ------------------------------------------------------------------------------------
<FN>
(1) According to its Schedule 13G dated January 24, 1995 filed with the
Securities and Exchange Commission. The Schedule 13G states that State Farm
Mutual Automobile Insurance Company has sole voting and sole investment
power with respect to 611,410 shares of the Common Stock of the Company,
and State Farm Fire and Casualty Company has sole voting power and sole
investment power with respect to 100,000 shares of the Common Stock of the
Company.
(2) According to its Schedule 13D dated September 19, 1994, Amendment No. 1
thereto dated October 20, 1994, Amendment No. 2 thereto dated November 18,
1994 and Amendment No. 3 thereto dated February 10, 1995 filed with the
Securities and Exchange Commission. Amendment No. 3 to such Schedule 13D
states that Cross Timbers Oil Company has sole voting power and sole
investment power with respect to 644,400 shares of Common Stock of the
Company and shares voting and investment power with WTW Properties, Inc., a
newly-formed and wholly-owned subsidiary of Cross Timbers Oil Company, with
respect to 100 shares of Common Stock of the Company.
</TABLE>
COST AND METHOD OF PROXY SOLICITATION
- - - - - - --------------------------------------------------------------------------------
Except as described above, the cost of this proxy solicitation will be borne by
the Company. In addition to the solicitation of Proxies by use of the mails, the
Company may utilize the services of some of its directors, officers and regular
employees (who will receive no compensation therefor in addition to their
regular salaries) to solicit Proxies personally and by telephone and telegraph
from brokerage houses and other shareholders. The Company will reimburse banks
and brokers who hold shares of the Company's stock in their name or custody, or
in the name of nominees for others, for their out-of-pocket expenses incurred in
forwarding copies of the proxy materials to those persons for whom they hold
such shares. The Company has also retained D.F. King & Company, Inc. to aid in
the solicitation of Proxies, at a cost of $7,000 plus reasonable out-of-pocket
expenses.
VOTING PROCEDURES
- - - - - - --------------------------------------------------------------------------------
Votes at the Annual Meeting of Shareholders are counted by Inspectors of
Election appointed by the Chairman of the meeting. If a quorum is present, an
affirmative vote of a majority of the votes entitled to be cast by those present
in person or by proxy is required for the approval of items submitted to
shareholders for their consideration, including the election of directors,
unless a different number of votes is required by statute or the Company's
Restated Certificate of Incorporation. Abstentions by those present at the
meeting are tabulated separately from affirmative and negative votes and do not
constitute affirmative votes. If a shareholder returns his proxy card and
withholds authority to vote for either or both of the nominees, the
13
<PAGE>
votes represented by the proxy card will be deemed to be present at the meeting
for purposes of determining the presence of a quorum but will not be counted as
affirmative votes. Shares in the name of brokers that are not voted are treated
as not present.
DATE OF RECEIPT OF SHAREHOLDER PROPOSALS
- - - - - - --------------------------------------------------------------------------------
Any proposal which a shareholder intends to present to the 1996 Annual Meeting
of Shareholders must be received at the Company's principal executive offices by
November 13, 1995 in order to be included in the Proxy Statement and the form of
Proxy for that meeting.
The Company's Restated Certificate of Incorporation establishes an advance
notice procedure with regard to certain matters to be brought before the Annual
Meeting of Shareholders. In general, written notice must be received by the
Company's Secretary at its principal executive offices not less than 90 days
prior to the meeting or, if later, not less than 90 days before the anniversary
date of the immediately preceding Annual Meeting of Shareholders, and must
contain specified information concerning the matters to be brought before the
meeting as well as the shareholder submitting the proposal. A copy of the
applicable Restated Certificate of Incorporation provision may be obtained,
without charge, upon written request to the Company's Secretary at the address
set forth on page one of this Proxy Statement.
OTHER MATTERS
- - - - - - --------------------------------------------------------------------------------
Except as described above, the Board of Directors does not intend to present,
and does not have any reason to believe that others will present, any other item
of business at the Annual Meeting of Shareholders. However, if other matters are
properly presented for a vote, the Proxies will be voted upon such matters in
accordance with the judgment of the persons acting under the Proxies.
By Order of the Board of Directors
Eugene A. Lang, Jr.
SECRETARY
14
<PAGE>
PRELIMINARY COPIES
PLAINS PETROLEUM COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James A. Miller and William F. Wallace and
each of them proxies, with full power of substitution, to vote all shares of
Common Stock of Plains Petroleum Company which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Shareholders to be held
on April 13, 1995 at 10:30 a.m. Mountain Time, and at any adjournments and
postponements thereof, upon the matters that may properly come before the
meeting or any adjournments and postponements thereof. Said proxies are directed
to vote as instructed on the matters set forth below and otherwise in their
discretion. Receipt of a copy of the Notice of said meeting and related Proxy
Statement is hereby acknowledged.
1. Election of Class I Directors
<TABLE>
<S> <C> <C>
/ / FOR both nominees listed / / WITHHOLD AUTHORITY to vote for all nominees listed
</TABLE>
William W. Grant, III and Charles E. Wright
(To withhold authority to vote for any individual nominee, strike a line through
his name above.)
(Continued on reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED. IN
THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF WILLIAM
W. GRANT, III AND CHARLES E. WRIGHT AS CLASS I DIRECTORS.
Dated ______________________ , 1995
___________________________________
Signature
___________________________________
Signature if held jointly
IMPORTANT: PLEASE MARK AND DATE THE
PROXY AND SIGN EXACTLY AS YOUR NAME
OR NAMES APPEAR THEREON. If stock
is held jointly, all joint owners
must sign. Executors,
administrators, trustees,
guardians, custodians, corporate
officers and others signing in a
representative capacity should give
their full titles.
