PRELIMINARY COPY
PETROLEUM DEVELOPMENT CORPORATION
103 East Main Street
Bridgeport, West Virginia 26330
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 31, 1998
To the Stockholders of
PETROLEUM DEVELOPMENT CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of
Petroleum Development Corporation (the "Company") will be held at the office
of the Company at 103 East Main Street, Bridgeport, West Virginia 26330, on
July 31, 1998 at 10:00 A.M., West Virginia time, for the following purposes,
all as more fully described in the accompanying Proxy Statement:
(1) To elect two directors to serve a term of three years or until
their successors shall be elected and shall qualify;
(2) To consider and approve the amendment and restatement of the
Company's Articles of Incorporation to increase the number of authorized
shares of the Company's Common Stock, to repeal the authorized but unissued
Class A Common Stock of the Company and to otherwise consolidate and conform
the Articles of Incorporation and all amendments thereto to existing Nevada
law.
(3) To consider and approve an amendment to the Company's Articles of
Incorporation to provide for certain limitations of personal liability of
directors and officers of the Company in the management of the Company's
business.
(4) To ratify and approve the selection of independent public
accountants for the Company for the fiscal year ending December 31, 1998.
The Board of Directors has fixed the close of business on June 1, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting. The presence in person or by proxy of the
holders of a majority of the outstanding shares of the Company's Common Stock
is required to constitute a quorum.
EACH STOCKHOLDER IS CORDIALLY INVITED TO BE PRESENT AND TO VOTE AT
THIS MEETING IN PERSON. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND ARE
REQUESTED TO SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTPAID ENVELOPE.
By Order of the Board of Directors,
James N. Ryan
Chairman
Bridgeport, West Virginia
May 26, 1998<PAGE>
PETROLEUM DEVELOPMENT CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
July 31, 1998
INTRODUCTORY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of proxies for use at the Annual Meeting of
Stockholders of Petroleum Development Corporation (the "Company") to be held
on July 31, 1998, notice of which is attached, and at any adjournment thereof.
Any stockholder giving the accompanying proxy has the power to revoke
it prior to its exercise by filing with the Secretary of the Company a written
notice of revocation or a duly executed proxy bearing a later date. Giving the
accompanying proxy will not affect your right to vote in person should you find
it convenient to attend the Annual Meeting. Shares represented by proxy will
be voted by the proxy holders in accordance with your instructions unless you
revoke your proxy or attend the meeting and elect to vote in person. This
Proxy Statement and the proxy were first mailed to stockholders on May 26,
1998. The mailing address of the principal executive offices of the Company
is Petroleum Development Corporation, P.O. Box 26, Bridgeport, West Virginia
26330.
The Annual Report to Stockholders for 1997, containing certified
financial and other information about the Company, accompanies this Proxy
Statement.
VOTING SECURITIES
The outstanding voting securities of the Company as of June 1, 1998,
consisted of 15,510,762 shares of $0.01 par value common stock ("Common
Stock"). Stockholders of record as of the close of business on June 1, 1998
are entitled to vote. Each stockholder is entitled to one vote for each
share of Common Stock held of record on this date. Stockholders are not
permitted to cumulate their votes for the election of directors. Abstentions
and broker non-votes will be counted in the number of shares present in
person or represented by proxy for purposes of determining whether a quorum
is present.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's By-Laws provide that the directors of the Company shall
be divided into three classes and that, at each annual meeting of stockholders
of the Company, successors to the class of directors whose term expires at the
annual meeting will be elected for a three-year term. The classes are staggered
so that the term of one class expires each year. Mr. Ryan and Mr. D'Annunzio
are members of the class whose term expires in 1998; Mr. Rettinger and Mr.
Swoveland are members of the class whose term expires in 1999; and Mr.
Williams and Mr. Morgan are members of the class whose term expires in 2000.
There is no family relationship between any director or executive officer and
any other director or executive officer of the Company. There are no
arrangements or understandings between any director or officer and any
other person pursuant to which such person was selected as an officer.
Votes pursuant to the enclosed proxy will be cast, unless authority is
withheld, for the election of the two persons named under "Nominees for
Terms Expiring 2001" below, both of whom are members of the present Board
and both of whom are expected to be able to serve on the Board to be
elected at this meeting. If any of such persons is unwilling or unable to
act in such capacity, an event which is not now anticipated, the enclosed
proxy will be voted for such person or persons as the Board of Directors may
designate. During 1997, the Board of Directors held six meetings. No
director attended fewer than 75% of the aggregate of all meetings of the
Board and the committees, if any, upon which such director served.
Vote Required
A plurality of the votes cast at the Annual Meeting in person or by
proxy, is required for the election of directors. Abstentions and broker
non-votes will not be considered as votes cast with respect to the election
of directors, and therefore any abstentions or broker non-votes will not
affect the election of the candidates receiving a majority of the votes cast.
THE BOARD OF DIRECTORS RECOMMEND A VOTE
"FOR" PROPOSAL 1
DIRECTORS OF THE COMPANY
NOMINEES FOR TERMS EXPIRING 2001
The following persons, both of whom are currently serving as directors,
have been nominated to serve as directors:
<TABLE>
<S> <S> <S> <S>
Name and Principal Year First
Occupation Past Five Years Elected
and Other Directorships Age Director
JAMES N. RYAN served as President of the Company from 1969 to 1983 and
has served as director of the Company since 1969. Mr. Ryan was elected
Chairman and Chief Executive Officer of the Company in March 1983. Mr.
Ryan focuses on capital formation through the Company's drilling
partnerships. 66 1969
VINCENT F. D'ANNUNZIO a director since February 1989, has for the past
five years served as President of Beverage Distributors, Inc., located
in Clarksburg, West Virginia. Mr. D'Annunzio serves as a director of
Heritage Bank in Clarksburg, West Virginia. 45 1989
CONTINUING DIRECTORS TERMS EXPIRING IN 1999
DALE G. RETTINGER has served as Vice President and Treasurer of the
Company since July 1980. Additionally, Mr. Rettinger has served as
President of PDC Securities Incorporated since 1981. Mr. Rettinger
was elected director in 1985 and appointed Chief Financial Officer in
September 1997. Previously, Mr. Rettinger was a partner with KPMG
Main Hurdman, Certified Public Accountants, and served in that capacity
from 1976 until he joined the Company. 53 1985
JEFFREY C. SWOVELAND a director since March 1991, has been employed by
Equitable Resources, an oil and gas production, marketing and distribution
company, since 1994 and presently serves as Treasurer. Mr. Swoveland
previously served as Vice President and a lending officer with Mellon
Bank, N.A. from July 1989 until 1994. 42 1991
CONTINUING DIRECTORS TERMS EXPIRING IN 2000
STEVEN R. WILLIAMS has served as President and director of the Company since
March 1983. Prior to joining the Company, Mr. Williams was employed by
Exxon as an engineer from 1973 until 1979. A 1981 graduate of the
Stanford Graduate School of Business, Mr. Williams was employed by
Texas Oil and Gas Company as a financial analyst from 1981 until July
1982, when he joined Exco Enterprises as Manager of Operations, and
served in that capacity until he joined the Company. 47 1983
ROGER J. MORGAN a director and Secretary of the Company since 1969,
has been a member of the law firm of Young, Morgan & Cann, Clarksburg,
West Virginia, for more that the past five years. Mr. Morgan is not
active in the day-to-day business of the Company, but his law firm
provides legal services to the Company. 71 1969
</TABLE?\>
Committees of the Board of Directors
The Company has three standing committees of the Board of Directors:
the Executive Committee; the Audit Committee; and the Stock Option and
Executive Compensation Committee. The Executive Committee is comprised of
Messrs. Ryan, Williams, and Rettinger. The Audit Committee is comprised of
Messrs. D'Annunzio, Ryan, and Swoveland. The Stock Option and Executive
Compensation Committee is comprised of Messrs. D'Annunzio and Swoveland. The
Company does not have a formal Nominating Committee, the full Board of
Directors handles these responsibilities.
The functions performed by the Executive Committee include handling
important Board of Directors matters that arise between Board of Directors
meetings, serving as a liaison between the Board of Directors and senior
management on important matters requiring Board of Directors attention and
recommending to the Board of Directors nominations for election of new and
existing members of the Board of Directors.
The Audit Committee is comprised of a majority of outside Directors of
the Company. The functions performed by the Audit Committee include
recommending the selection of independent accountants, reviewing with the
Company's independent accountants the results of audits performed by them
and overseeing and reviewing monthly and quarterly unaudited financial
statements. These reviews include the adequacy of cash flow and the status
of credit arrangements of the Company.
The Stock Option and Executive Compensation Committee is comprised
entirely of outside Directors of the Company. The functions performed by
this committee include recommending to the Board of Directors compensation
levels of senior management and directing and recommending levels of
corporate stock options and other benefit plans ofthe Company. In this
regard, the committee monitors trends to ensure the Company's compensation
levels are competitive in the oil and natural gas industry.
Compensation Committee Interlocks and Insider Participation
The members of the Stock Option and Executive Committee are Messrs.
D'Annunzio and Swoveland. There are no Stock Option and Executive Committee
interlocks.
Indemnification of Directors and Officers
The Company's By-Laws provide that the Company shall indemnify any
director, officer, employee, or other agent of the Company who is or was a
party, or is threatened to be made a party, to any proceeding (other than an
action by or in the right of the Company to procure a judgment in its favor)
by reason of the fact that such person is or was an agent of the Company
against expenses, judgments, fines, settlements, and other amounts actually
and reasonably incurred in connection with such proceeding, if that person
acted in good faith and in a manner that person reasonably believed to be
in the best interest of the Company, and in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of that person
was unlawful.
The Company has entered into separate indemnification agreements with
each of its directors and officers whereby the Company has agreed to indemnify
the director or officer against all expenses, including attorneys' fees, and
other amounts reasonably incurred by the officer or director in connection
with any threatened, pending or completed civil, criminal, administrative or
investigative action or proceeding to which such person is party by reason
of the fact that he is or was a director or officer, as the case may be, of
the Company, if the person acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, the person had no
reasonable cause to believe such conduct to be unlawful. The agreements
provide for the advancement of expenses and that the Company has the right
to purchase and maintain insurance on behalf of the director or officer
against any liability or liabilities asserted against him, whether or not
the Company would have the power to indemnify the person against such
liability under any provision of the agreement. The Company has agreed to
indemnify such person against expenses actually and reasonably incurred in
connection with any action in which the person has been successful on the
merits or otherwise. Indemnification must also be provided by the Company
(unless ordered otherwise by a court) only as authorized in the specific
case upon a determination that the indemnification of the person is
appropriate because he has met the applicable standard of conduct described
in the agreement made by (i) the Board of Directors, by a majority vote of
a quorum consisting of directors who are not parties to such action or
proceeding, (ii) by independent legal counsel in a written opinion or
(iii) the shareholders of the Company.
Director Compensation
Each non-salaried employee director and outside director of the
Company is paid an annual fee of $20,000. Each inside director is paid an
annual fee of $10,000.
EXECUTIVE COMPENSATION
The following table sets forth in summary form the compensation
received during each of the Company's last three fiscal years by the Chief
Executive Officer and by each other executive officer of the Company whose
salary and bonus exceeded $100,000 in 1997 (the "Named Executives").
</TABLE>
<TABLE>
<S> <S> <S> <S> <S> <S> <S> <S>
Summary Compensation Table
Annual Compensation Long Term Compensation
Other Securities
Annual Restricted underlying All Other
Name and Compen- stock award Options Compen-
Principal Position Year Salary($) Bonus (1)($) sation($)(2) (s)($)(3) (#)(4) sation($)(5)
James N. Ryan 1997 170,760 210,120 10,000 108,000 10,335
Chairman and Chief 1996 164,295 153,383 10,000 10,897
Executive Officer 1995 159,330 100,000 10,000 33,750 70,000 4,111
Steven R. Williams 1997 132,360 210,120 10,000 108,000 10,200
President 1996 125,895 153,383 10,000 10,862
and Director 1995 120,930 100,000 10,000 33,750 70,000 4,125
Dale G. Rettinger 1997 132,360 210,120 10,000 108,000 10,200
Executive Vice President, 1996 125,895 153,383 10,000 10,862
Treasurer, and Director 1995 120,930 100,000 10,000 33,750 70,000 4,125
</TABLE>
[FN]
(1) During 1994, the Board of Directors approved a deferred compensation
arrangement for the Named Executives. See "Employment and Other Agreements
and Arrangements." Under the arrangements, each Named Executive may choose
to defer any portion of his bonus compensation until retirement or separation
from the Company. The Named Executives voluntarily deferred $110,000 each
in 1997; $80,000, $60,000 and $60,000, respectively in 1996; and
$30,000 each in 1995. In 1997, 1996 and 1995, $30,000 of the deferred
bonus compensation of Messrs. Williams and Rettinger was utilized to pay
the premiums of split-dollar life insurance policies for Messrs. Williams and
Rettinger.
(2) The respective Named Executives receive fees as directors of the Company
in the amount of $10,000 per year.
(3) In 1995, the Company granted a restricted stock award of 30,000 shares of
Common Stock to each of the Named Executives at the grant date market price of
$1.125 per share. These shares will vest upon a Named Executive's retirement
or involuntary separation from employment with the Company, or upon a change
of control of the Company. The aggregate value of the holdings of each
individual as of December 31, 1997 was $157,500.
<PAGE>
(4) The exercise price of the options granted in 1995 is $1.125 per share.
In 1997, the Company granted each Named Executive options to purchase 108,000
shares of Common Stock at an exercise price of $5.125 per share, the fair
market value of such shares of Common Stock at the date of grant. The
options may be exercised with respect to one-half of the shares granted
thereunder on or after July 15, 1998 and with respect to one-half of the
shares granted thereunder on or after July 15, 1999, provided that the
grantee is employed with the Company on the exercise date. Such options
expire on July 15, 2007.
(5) This amount includes contributions made by the Company under the Company's
Employee Profit Sharing Plan and 401(k) plan. In 1997, 1996, and 1995 the
Company contributed $15,500, $50,000, and $28,500, respectively, to the
Employee Profit Sharing Plan. Of these contributions, each of the
Named Executives was credited $952 in 1997, $3,071 in 1996; $1,815 in 1995.
The Company provided a matching of 401(k) contribution based upon varying rates
of the Named Executives' respective contributions. Of the total Company
matching contribution of $171,300, $139,800 and $71,800 in 1997, 1996 and
1995, the Named Executives were credited with matching contributions of
$9,383, $9,248, and $9,248, respectively in 1997; $7,826, $7,791 and $7,791,
respectively in 1996; and $4,111, $4,125 and $4,125, respectively, in 1995.
Compensation Committee Report
The Compensation Committee is composed of two outside directors. The
committee's responsibility is to develop the Company's compensation policy
to enable the Company to hire, retain and motivate high performing employees.
The committee also administers the Company's Savings and Protection Plan (the
"401(k) Plan"), various Employee Stock Option Plans, and the Company's Profit
Sharing Plan. The committee reviews the performance and compensation of the
Chief Executive Officer, and the two executive officers of the Company.
Final approval of all contracts with company executives is reserved to the
full Board of Directors.
Compensation paid to the CEO, Mr. Ryan, and to the executive officers of
the Company is based on several factors, including the terms of their
employment contracts, the earnings of the Company, the evaluation of the Board
of the performance of the employees, as well as compensation paid to similarly
situated employees with other similar firms.
As CEO, Mr. Ryan received a salary of $170,760 in 1997, which reflected
cost of living increases from his salary in 1996. Also during 1997 Mr. Ryan
earned a cash bonus of $210,120 based on Company earnings. Both the salary
increase and the bonus were based on provisions in Mr. Ryan's employment
contract.
The Company also contributed $9,383 in 1997 to Mr. Ryan's 401(k) account
in accordance with the plan's matching provisions to all participating
employees.
The compensation of the two executive officers of the Company is also
comprised of a salary and a performance based bonus. Salaries of both were
increased by a cost of living adjustment and bonuses were paid based on the
Company's earnings, both as provided in the executive's employment agreements.
Both executives also received a share of Company matching contributions to the
Company 401(k) plan.
During 1997 the Company reviewed the employment contracts of the CEO and
the executive officers of the Company, and determined that no changes were
required. The Compensation Committee believes the Company has made substantial
progress over the past several years despite adverse industry and economic
conditions, and that the progress is attributable in large measure to the
efforts of the CEO and the executive officers.
Compensation Committee
Vincent F. D'Annunzio, Chair
Jeffrey C. Swoveland
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth stock options granted in 1997 under the
Employee Incentive Stock Option Plan to the persons named in the Summary
Compensation table.
<TABLE>
<S> <S> <S> <S> <S> <S>
% of Total
Number of Options Granted to
Options Employees during Exercise Expiration Grant Date
Granted the fiscal year Price($) Date Value($)
James N. Ryan 108,000 22% 5.125 7/15/07 356,400
Steven R. Williams 108,000 22% 5.125 7/15/07 356,400
Dale G. Rettinger 108,000 22% 5.125 7/15/07 356,400
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table provides certain information with respect to options
exercised during 1997 by the persons named in the summary compensation under
the Company's stock option plans. The table also represents information as
to the number of options outstanding as of December 31, 1997 with respect to
options granted pursuant to the Company's Employee Stock Option Plans.
<TABLE>
<S> <S> <S> <S> <S> <S> <S>
Number Value of Unexercised
of Shares Value Number of Unexercised Options In-The-Money Options
Exercised Realized ($) at Year-end at Year-End(1)($)
Exercisable Unexercisable Exercisable Unexercisable
James N. Ryan - - 401,000 108,000 1,716,187 13,500
Steven R. Williams - - 391,000 108,000 1,673,062 13,500
Dale G. Rettinger - - 391,000 108,000 1,673,062 13,500
</TABLE>
[FN]
(1) For all unexercised options held as of December 31, 1997, the aggregate
dollar value is equal to the excess of the market value of the stock underlying
those options over the exercise price of those unexercised options. On
December 31, 1997, the closing sales price of the Common Stock was $5.25
per share.
</FN>
Employment and Other Agreements and Arrangements
The Company has entered into employment agreements with each of the
Named Executives, each of which has a term that has been extended to December
31, 2000. Pursuant to the respective terms of the employment agreements, each
of the Named Executives is entitled to receive the basic annual salary set
forth therein that is subject to increase, but not decrease (unless dire
economic circumstances as declared by the Board of Directors requires a
reduction for all senior executive employees of the Company), as the Board
of Directors may determine to reflect changes in the cost of living,
the financial success of the Company and the performance of such Named
Executive. For 1997, the basic salary has been set by the Board of
Directors under the respective agreements as $170,760 for Mr. Ryan, $132,360
for Mr. Williams and $132,360 for Mr. Rettinger. Each Named Executive is
also entitled to be paid an annual bonus equal to 2.5% of the Company's net
pre-tax earnings for any year in which the Company's net pre-tax earnings
exceed $300,000. The Company has been required to establish a deferred
compensation plan, described below, for the Named Executives and to fund such
plan with an annual contribution of $30,000 commencing in 1994, subject to
adjustment for inflation.
In the event of a change in control of the Company, each Named Executive
has the right within six months after such change of control to elect to
terminate his employment under his employment agreement and receive severance
compensation equal to the sum of his basic salary plus an amount equal to the
average bonus paid to him over the preceding three years as provided in the
agreement multiplied by the remaining years of the employment agreement,<PAGE>
provided, however, that the minimum severance compensation must not be less
than the amount equal to three years of basic compensation plus an amount
equal to three times the average bonus paid to such person over the preceding
three-year period.
Each employment agreement also provides that if the Company obtains the
right to sell working interests in any drilling program, the Named Executive is
entitled to participate as an investor in such oil and gas drilling project
subject to the prior approval by the Board of Directors of the terms of any
such participation.
Each employment agreement contains a standard non-disclosure covenant.
Each employment agreement also provides that the Named Executive is prohibited
during the term of his employment and for a period of one year following
his termination from engaging in any business that is competitive with the
Company's oil and gas drilling business in West Virginia, unless his
termination results from a change of control of the Company. During any
period for which the non-competition provision prohibits the officer from
pursuing activities that would compete with the Company's business as
provided in the agreement following termination of the agreement, the
Company is required to pay the officer his basic salary and bonus as
provided in the agreement.
In the event of termination under the terms of the agreement, the
Company will be required to loan to the officer funds equal to the exercise
price of all options held by the Named Executive under the Company's stock
option plans, which loan, if made, must be repaid within nine months and
will bear interest at the prime rate then in effect.
Each employment agreement may be terminated for cause for willful
misfeasance or malfeasance, disregard of the Named Executive's duties or
negligence related to the performance of his duties, if so determined by a
court of competent jurisdiction. Also, the Company may terminate the
employment agreement without cause, in which case the Company must
either (i) reassign the Named Executive to a comparable executive
position or designate him as a consultant for the remaining term of his
agreement (ii) pay him liquidated damages in an amount equal to his then
basic salary for the remaining term of the employment agreement, with a
minimum payment equal to twelve months of basic salary.
The Company has entered into stock redemption agreements with each of
the Named Executives. The agreements require the Company to maintain life
insurance policies on each of them in the amount of $1 million. At the
election of the Named Executive's estate or heirs made within one year of
such person's death, the Company must utilize the proceeds from such
insurance policies to purchase from his estate or heirs all or a portion of
his shares of the Company's Common Stock owned by him, including shares
subject to outstanding stock options or warrants owned by such Named Executive
at the time of his death, up to an aggregate sale price of $1 million. The
purchase price for such shares of Common Stock will be based upon the average
closing asked price for the Company's Common Stock as quoted by Nasdaq during
a specified period. The Company is not required to purchase any shares in
excess of the amount provided by such insurance policies. If the Named
Executive's estate or heirs elect not to sell any or all of the shares to
the Company, the estate or heirs will be precluded from selling the shares
to anyone for a period of two years after the date of the person's death,
except that the shares may be transferred into the names of the decedent's
heirs and beneficiaries and the stock sold pursuant to Rule 144 under the
Securities Act. If the Named Executive terminates his employment with the
Company or disposes of all of all or substantially all of his shares of
Common Stock in the Company, the Named Executive has the right to purchase
his respective insurance policy for a price equal to the cash surrender value
of the policy as of the date of such event. If the Named Executive fails to
purchase the policy within ninety days after such event, the Company may
cancel all policies covering the life of the Name Executive. The stock
redemption agreements will terminate upon bankruptcy or cessation of business
by the Company.
Mr. Ryan, Mr. Williams and Mr. Rettinger are also the participants in
the Company's deferred bonus compensation plan. Under this plan, the
Company's Board of Directors must declare a year-end bonus for each
participant, the receipt of which is automatically deferred pursuant to the
plan, unless prior to the beginning of a particular year, the participant
enters into a voluntary bonus compensation agreement under which he
irrevocably elects to receive his year-end bonus as cash compensation,
payable as soon as practicable following the end of the year. The amount
of the participant's year-end<PAGE>
bonus is a minimum of $30,000 or such greater
amount as may be declared by the Board of Directors. The participant also
has the right to elect to defer receipt of his other bonus compensation
under this plan. Any bonus compensation deferred under this plan will not
be paid until such participant's retirement, or upon termination of
employment, disability or death or upon hardship, as provided in the plan.
A trustee selected by the Board of Directors maintains accounts for each
participant under the plan. The Company has reserved the right to terminate
the deferred bonus compensation plan, in whole or in part, at any time and
without liability for such termination or discontinuance.
Stock Option Plans
Under the Company's incentive stock option plans, options to purchase
shares of Common Stock of the Company may be granted to certain officers and
key employees of the Company, which options are intended to qualify as incentive
stock options under the provisions of the Internal Revenue Code. Under the
plan adopted in 1997, the Company granted options for an aggregate of
500,000 shares of Common Stock at an exercise price of 100% of the fair
market value per share of the Company's Common Stock on the date of grant.
The options may be exercised with respect to one-half of the shares granted
on or after the first anniversary of the date of grant and with respect to
the other one-half of the shares granted on or after the second anniversary
of the date of grant. Options will expire ten years from the date of grant
if not exercised. A dissolution or liquidation of the Company or a merger
or consolidation in which the Company is not the surviving corporation will
cause each outstanding option to terminate, provided that each optionee, in
such event, will have the right immediately prior to said dissolution or
liquidation or merger or consolidation to exercise his option in whole
or in part without regard to any installment vesting provisions with respect
to such options.
Key-Man Life Insurance
The Company maintains key-man life insurance policies on the lives of
Messrs. Ryan, Williams and Rettinger in the amounts of $5.0 million, $1.0
million, and $1.0 million, respectively. The Company is the beneficiary of
each policy.
Employee 401k and Profit Sharing Plan
In 1987, the Company established a retirement plan qualified under
Section 401(k) of the Internal Revenue Code. The plan is funded by employee
contributions and a company matching contribution. Administrative costs of
the plan are borne by the Company. The employees choose from four investment
programs and, therefore, the amount of an individual's plan assets depends on
the amount of their contributions and the performance by their chosen
investments.
In 1992, the Company began a Profit Sharing Retirement plan to
supplement the 401(k) Plan. Contributions are dependent on corporate
profitability and are at the discretion of the Board of Directors of the
Company. The Company filed and qualified the plan with the Internal Revenue
Service.
<PAGE>
Stockholder Performance Graph
The following graph illustrates the performance of Petroleum Development
Corporation common stock over a five year period compared to the performance of
the NASDAQ Index and a peer group index. The peer group index consists
of 184 Crude Petroleum and Natural Gas Companies. The table includes the
cumulative shareholder return assuming the reinvestment of dividends.
<TABLE>
<S> <S> <S> <S> <S> <S> <S>
Petroleum Development Corporation
Stock Performance Graph
500.0
400.0
300.0
200.0
100.0
0.0
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
Petroleum
Development
Corporation 100.0 150.00 105.56 144.44 372.22 466.67
Industry Index 100.0 119.15 124.87 137.33 182.60 185.09
Broad Market
Index 100.0 119.95 125.94 163.35 202.99 248.30
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of the
Company's Common Stock as of December 31, 1997 by (a) each person known by the
Company to own beneficially more than 5% of the outstanding shares of
Common Stock; (b) each director of the Company; (c) each Named Executive;
(d) all directors and executive officers as a group.
<TABLE>
<S> <S> <S>
Beneficial Ownership (1)
Name and Address Number Percent
Fidelity Management . . . . . . . . . . . . . . . . . . . . . . . . . . .1,255,000 8.2
82 Devonshire Street
Boston, MA 02109
James N. Ryan(2). . . . . . . . . . . . . . . . . . . . . . . . . . . 971,434 6.4
103 East Main Street
Bridgeport, WV 26330
Steven R. Williams(3) . . . . . . . . . . . . . . . . . . . . . . . . . . .562,560 3.6
103 East Main Street
Bridgeport, WV 26330
Dale G. Rettinger(3). . . . . . . . . . . . . . . . . . . . . . . . . . . .517,834 3.3
103 East Main Street
Bridgeport, WV 26330
Roger J. Morgan(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . .132,504 *
Vincent F. D'Annunzio(5). . . . . . . . . . . . . . . . . . . . . . . . . . 53,600 *
Jeffrey C. Swoveland(6) . . . . . . . . . . . . . . . . . . . . . . . . . . 22,094 *
All directors and executive officers as a
group (6 persons)(7) . . . . . . . . . . . . . . . . . . . . . . . . . .2,260,026 13.7
</TABLE>
[FN]
* Less than 1%
(1) Includes shares over which the person currently holds or shares voting or
investment power. Unless otherwise indicated in the footnotes to this
table, the persons named in this table have sole voting and investment power
with respect to the shares beneficially owned.
(2) Includes 200,000 shares owned jointly with Mr. Ryan's wife, 200,369
shares owned by Mr. Ryan's wife and 64,258 shares owned by Mr. Ryan's wife
as guardian for their minor grandchildren. The balance of the shares are owned
solely by Mr. Ryan. Also includes options to purchase 401,000 shares of Common
Stock that Mr. Ryan can currently exercise or that will become exercisable
within 60 days. Excludes 108,000 shares underlying options granted on July
15, 1997 exercisable after such 60-day period.
(3) Includes options to purchase 391,000 shares that such person can
currently exercise or that will become exercisable within 60 days. Excludes
108,000 shares underlying options granted to such person on July 15, 1997
exercisable after such 60-day period.
(4) Includes options to purchase 47,500 shares that Mr. Morgan can currently
exercise or that will become exercisable within 60 days.
(5) Includes options to purchase 13,600 shares that Mr. D'Annunzio can
currently exercise or that will become exercisable within 60 days.
(6) Includes options to purchase 3,550 shares that Mr. Swoveland can
currently exercise or that will become exercisable within 60 days.
(7) Includes options to purchase 1,247,650 shares that such persons can
currently exercise or that will become exercisable within 60 days.<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
</FN>
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a Company's equity
securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, directors and holders
of more than 10% of the Common Stock are required by regulations promulgated
by the Commission pursuant to the Exchange Act to furnish the Company with
copies of all Section 16(a) forms they file. The Company assists officers
and directors, and will assist beneficial owners, if any, of more than 10%
of the Common Stock, in complying with the reporting requirements of Section
16(a) of the Exchange Act.
Based solely on its review of the copies of such forms received by it,
the Company believes that since January 1, 1997, all Section 16(a) filing
requirements applicable to its directors, officers and greater than 10%
beneficial owners were met.
PROPOSAL 2
AMENDMENT AND RESTATEMENT OF THE COMPANY'S ARTICLES OF
INCORPORATION
Description of the Amended and Restated Articles of Incorporation
At the Annual Meeting, the stockholders will be asked to consider and
vote upon a proposal to approve the amendment and restatement of the
Company's existing Articles of Incorporation (the "Articles") to:
(i) increase the number of authorized shares of Common Stock of the
Company from 22,250,000 shares to 50,000,000 shares; (ii) remove from
the Articles the Company's authorized, but unissued, 2,750,000 shares of
non-voting Class A Common Stock; and (iii) make other technical changes to
other provisions of the Company's Articles, in conformity with current Nevada
law. The stockholders are being asked separately under Proposal 3 below to
consider and vote upon an amendment to the Articles of Incorporation to add
a provision limiting personal liability of directors and officers of the
Company for monetary damages as permitted by Nevada law, which amendment
will be also included in the amended and restated Articles of
Incorporation if Proposal 3 is approved by the stockholders at the Annual
Meeting.
The full text of the proposed amended and restated Articles (the
"Amended and Restated Articles of Incorporation") is attached hereto as
Exhibit A. If Proposal 2 is adopted, the provision limiting personal
liability of directors and officers will be included in the Amended and
Restated Articles of Incorporation only if Proposal 3 is also adopted.
If Proposal 2 is not adopted but Proposal 3 is adopted, the provision
limiting personal liability of directors and officers will be added
by amendment to the existing Articles.
The Board of Directors believes it is advisable to amend and restate the
Articles pursuant to this Proposal 2 for the following reasons: (i) the
Company should have additional shares of Common Stock available for various
corporate programs and purposes; (ii) no authorized shares of Class A Common
Stock are needed and none are currently outstanding; (iii) the Articles
should be conformed to current provisions of Nevada law; and (iv)
consolidating the Articles into a single document will facilitate their use
and avoid confusion.
Capital Stock
The authorized capital stock of the Company is 22,250,000 shares of
Common Stock and 2,750,000 shares of non-voting Class A Common Stock. As of
June 1, 1998, there were 15,510,762 shares of Common Stock issued and
outstanding and no shares of Class A Common Stock were issued and
outstanding. An additional 1,693,317 authorized but unissued shares of
Common Stock have been reserved for issuance under the Company's stock
option plans for employees and directors or pursuant to warrants to
purchase Common Stock granted by the Company. Holders of Common
Stock and Class A Common Stock do not have preemptive rights to subscribe
to additional securities that may be issued by the Company.
Increase in Authorized Shares of Common Stock and Removal of Authorized Shares
of Class A Common Stock
The increase in the authorized number of shares of the Company's Common
Stock is being proposed because the Board of Directors believes that it is
advisable to have a greater number of authorized but unissued shares of Common
Stock available for various corporate programs and purposes. The Company may
from time to time consider acquisitions, stock dividends or stock splits, and
public or private financings to provide the Company and its subsidiaries with
capital, all of which may involve the issuance of additional shares of
Common Stock or securities convertible into Common Stock. Also, additional
shares of Common Stock may be necessary to meet anticipated future
obligations under the Company's employee benefit plans. The Board of
Directors believes that having authority to issue additional shares of
Common Stock will avoid the possible delay of calling and holding a special
meeting of stockholders to increase its authorized capital stock
at the time a transaction may be proposed, so as to enhance the Company's
ability to take prompt advantage of market conditions and to respond promptly
to any future acquisition opportunities.
The Company has no present plan, understanding or arrangement to issue
any of the additional shares of Common Stock that will be authorized if the
amendment is approved.
If the proposal is approved, the Board of Directors will not solicit
stockholder approval to issue the additional authorized shares except to the
extent that such approval may be required by law or the rules of The Nasdaq
Stock Market, and subject to such requirements, such shares may be issued
for such consideration, cash or otherwise, at such times, for such
purposes and in such amounts as the Board of Directors in its discretion
may determine, without further action by the stockholders. The future
issuance by the Company of shares of Common Stock may dilute the equity
ownership position of current holders of Common Stock. Under the rules of
The Nasdaq Stock Market applicable to the Company, stockholder approval must
be obtained prior to the issuance of shares for certain purposes, including
the issuance of shares in an amount equal to or in excess of 20% of the
Company's then outstanding shares in connection with a future acquisition by
the Company.
Although the Board of Directors currently intends to utilize the
Additional shares of Common Stock solely for the purposes set forth above,
such shares could also be used by the Board of Directors to dilute the stock
ownership of persons seeking to obtain control of the Company, thereby
possibly discouraging or deterring a non-negotiated attempt to obtain
control of the Company and making removal of incumbent management more
difficult. The proposal, however, is not a result of, nor does the Board
of Directors have knowledge of, any effort to accumulate the Company's
capital stock or to obtain control of the Company by means of a merger,
tender offer, solicitation in opposition to the Board of Directors or
otherwise.
The Class A Common Stock was authorized by the Board of Directors and
approved by the stockholders of the Company in 1991 in connection with a debt
restructuring. The Company's principal bank lender had required the
authorization of the Class A Common Stock and was issued warrants for the
purchase of 2,750,000 shares of Class A Common Stock. These warrants were
redeemed by the Company in 1993. Because neither the warrants nor any shares
of Class A Common Stock are outstanding, the Board of Directors believes that
the authorization of the Class A Common Stock should be deleted and removed
from the Company's Existing Articles in connection with their amendment and
restatement.
Consolidation and Restatement of Articles of Incorporation
Since the formation of the Company in 1955, the Nevada Revised Statutes
("NRS") have undergone a number of amendments and revisions, and the Company
has amended the Articles from time to time. Therefore, in order to conform
the Articles to current provisions of the NRS and to consolidate and restate
the Articles to facilitate their use, the following technical changes are
proposed in addition to the increase in authorized shares of Common Stock
and the removal of the authorized shares of Class A Common Stock:
(i) shortening the purpose clause of the Articles to provide that the Company
is permitted to engage in any lawful activity permitted under the NRS;
(ii) eliminating the provision permitting the directors to amend or repeal
the articles of incorporation inasmuch as the NRS generally requires
stockholder approval in addition to approval by the Board of Directors;
(iii) eliminating the provisions providing for additional powers of the
directors and officers to be set forth in the Company's By-Laws and
permitting the Board of Directors, committees of directors and stockholders
to take action by written consent, as these provisions are permitted under
the NRS and are not required to be set forth in articles of incorporation;
and (iv) updating the Articles to include the Company's current
registered office and agent. Conforming the Articles to the NRS as
currently in effect and consolidating the Articles by the adoption of
the Amended and Restated Articles of Incorporation will provide ease of
use of the Company's charter documents and will serve to avoid confusion.
Vote Required
Approval of the proposed Amended and Restated Articles of Incorporation
under this Proposal 2 will require the affirmative vote of the holders of a
majority of the shares of the Company's Common Stock outstanding and entitled
to vote. Abstentions and broker non-votes are considered shares of stock
outstanding and entitled to vote and are counted in determining the number
of votes necessary for a majority. An abstention or broker non-vote will
therefore have the practical effect of voting against approval of the
Amended and Restated Articles of Incorporation because it represents one
less vote for the approval of the Amended and Restated Articles of
Incorporation.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL 2.<PAGE>
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO PROVIDE FOR LIMITATION OF
PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
Description of Amendment to Provide for Limitation of Personal Liability for
Directors and Officers
At the Annual Meeting, the stockholders will be asked to vote on a
proposal to approve an amendment to the Company's Articles of Incorporation
to include a provision limiting personal liability of the Company's directors
and officers for monetary damages in the management of the Company's business,
as authorized pursuant to provisions of the NRS. The amendment will be
included in the Company's Amended and Restated Articles of Incorporation if both
this Proposal 3 and Proposal 2 above are approved by the stockholders at the
Annual Meeting. If this Proposal 3 is adopted but Proposal 2 is not adopted,
this proposed article will be added as amendment to the existing Articles.
Please refer to Article Ninth of the proposed Amended and Restated Articles
of Incorporation, attached hereto as Exhibit A for the text of the proposal
limitation of personal liability amendment.
Background of Proposal 3
Subsequent to the formation of the Company, amendments to the NRS in
1987, 1991 and 1993 permit a Nevada corporation to include in its articles
of incorporation a provision that eliminates the personal liability of
directors and officers to the corporation and its stockholders for monetary
damages for violations of fiduciary duty except for (i) acts or omissions
that involve intentional misconduct, fraud or knowing violations of law or
(ii) the payment of illegal dividends. The limitation of personal liability
under the proposed amendment affects only the potential liability of directors
and officers for monetary damages and does not permit the elimination or
limitation of the availability of equitable remedies, such as an injunction
or rescission against a director or officer, for violations of fiduciary duty.
The NRS provisions limiting such personal liability represent a legislative
response to changes in the market for directors and officers liability
insurance, including sharp increases in premiums and in some cases the
unavailability of traditional coverage. The availability of liability
insurance is a relatively standard condition of employment of officers and
the appointment of directors unaffiliated with the management of
corporations, and in some cases directors and officers of certain corporations
have resigned when such coverage has become unavailable. In other cases, the
absence of available insurance may deter directors and officers from making
entrepreneurial decisions. This situation was perceived by the Nevada
legislature as a threat to the quality and stability of the governance of
Nevada corporations. Therefore, these limitations on personal liability
provisions were enacted into Nevada law to allow Nevada corporations to
provide substitute protection for directors and officers and to limit their
personal liability for monetary damages under certain circumstances.
Effect of Amendment to Provide for Limitation of Liability
The proposed amendment, if approved, will eliminate or limit the
personal liability of directors and officers in the management of the
Company's business to the full extent currently or hereafter permitted by
Nevada law. If the amendment limiting personal liability is adopted,
neither the Company nor a stockholder will be able to sue a director or
officer for monetary damages for negligence or gross negligence in the
performance of his or her fiduciary duties. Actions for monetary damages
may be brought, however, if there can be shown that the director or officer
engaged in intentional misconduct, fraud or a knowing violation of law, or
approved or participated in an illegal dividend. The provision will
not preclude the Company or a stockholder from seeking an injunction,
rescission or other non-monetary relief in the eventof a breach of fiduciary
duty by a director or officer. Also, the limitation on personal liability
applies only to claims against a director or officer in his or her capacity
as such, and not to any claims arising out of his or her role in any other
capacity. Further, the limitation of personal liability will not apply to
acts or omissions of directors or officers occurring prior to the time of
adoption and will not have any effect on the remedies of stockholders under
federal securities laws. No suits are currently pending, or to the knowledge
of the Company, threatened against its directors or officers alleging
a violation of their fiduciary duty to the Company or its stockholders.
Although members of the Board of Directors have a personal interest in
approval of the limitation of personal liability provision, the Board of
Directors strongly believes this provision is in the best interests of the
Company and its stockholders. While the existing members of the Board of
Directors and officers have not indicated an intention to resign
if the limitation of personal liability provision is not approved, the
Company believes the approval of the provision is important to its ability
to recruit and retain competent directors and officers. In addition, the
Company believes that effective functioning of the Board of Directors and
officers might be impaired if directors and officers are not assured of
the traditional protection against lawsuits that challenge the prudence of
good faith business judgments.<PAGE>
Vote Required
Approval of the proposed amendment to the Articles under this Proposal 3
will require the affirmative vote of the holders of a majority of the shares of
the Company's Common Stock outstanding and entitled to vote. Abstentions and
broker non-votes are considered shares of stock outstanding and entitled to
vote and are counted in determining the number of votes necessary for a
majority. An abstention or broker non-vote will therefore have the practical
effect of voting against approval of the proposed amendment because it
represents one less vote for the approval of the proposed amendment.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL 3.
PROPOSAL #4
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
At the Meeting, the Stockholders of the Company will be asked to ratify
the Board of Directors' selection of KPMG Peat Marwick as the Company's
certified public accountants for the fiscal year ended December 31, 1998. KPMG
Peat Marwick conducted the audit for the fiscal year ended December 31, 1997.
A representative of KPMG Peat Marwick will be present at the Meeting, will have
an opportunity to make statements if he so desires, and will be available to
respond to appropriate questions.
Vote Required
A majority of the votes cast at the Annual Meeting, in person or by
proxy, is required for the ratification of the Board of Directors' selection
of independent accountants. Abstentions and broker non-votes will not be
considered as votes cast with respect to the ratification of the Board of
Directors' selection of independent accountants.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL #4
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company is not
aware of any matters to be brought before the Annual Meeting other than the
matters set forth in this Proxy Statement. However, if other matters properly
come before the Meeting, it is the intention of the proxy holders named in the
enclosed form of proxy to vote in accordance with their discretion on such
matters pursuant to such proxy.
General
The enclosed Proxy is solicited by the Company's Board of Directors.
The Company expects to solicit proxies primarily by mail, but solicitation
may also be made personally, by telephone or by telegraph, by regularly
employed officers and employees of the Company who will receive no extra
compensation for doing so.
The Company will request brokers and other custodians, nominees and
fiduciaries to forward proxy soliciting material to, and obtain instructions
from, the beneficial owners of shares held by record by such persons and will
reimburse reasonable out-of-pocket expenses. The Company will bear all costs
of proxy solicitation.
Stockholder Proposals for 1999 Annual Meeting
Stockholder proposals must be received by the Company at its principal
executive office on or prior to March 1, 1999 in order to be included in the
Company's proxy statement for the 1999 annual meeting of stockholders.
By Order Of The Board of Directors
James N. Ryan
Chairman
Dated: May 26, 1998<PAGE>
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY PERSON WHO IS A RECORD OR
BENEFICIAL HOLDER OF COMMON STOCK OF THE COMPANY, ON WRITTEN REQUEST OF SUCH
PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1997 INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO,
WHICH THE COMPANY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. COPIES
MAY BE OBTAINED BY WRITING TO CORPORATE COMMUNICATIONS DEPARTMENT, PETROLEUM
DEVELOPMENT CORPORATION, P.O. BOX 26, BRIDGEPORT, WEST VIRGINIA 26330.
<PAGE>
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PETROLEUM DEVELOPMENT CORPORATION
FIRST. The name of the Corporation is PETROLEUM DEVELOPMENT CORPORATION.
SECOND. The Corporation's registered office in the State of Nevada is
located at One East First Street, Reno, Nevada 89501. The name of the
Corporation's resident agent at such address is The Corporation Trust Company
of Nevada.
THIRD. The number of shares of capital stock the Corporation is
authorized to issue is 50,000,000 shares of Common Stock, par value $0.01 per
share.
FOURTH. The governing board of the Corporation shall be known as
directors, and the number of directors shall not be less than three (3) nor
more than nine (9).
FIFTH. The purpose of the Corporation is to engage in any lawful
activity permitted under the Nevada Revised Statutes.
SIXTH. The stock of the Corporation shall be fully paid and
nonassessable. No stockholder of the Corporation shall by reason of his
holding shares of any class have any preemptive or preferential right to
purchase or subscribe to any shares of any class of the Corporation, now or
hereafter to be authorized, or any shares or other securities convertible
into or carrying options or warrants to purchase shares of any class, now or
hereafter to be authorized, whether or not the issuance of any such shares
or other securities would adversely affect the dividend or voting rights of
such holders, other than such rights, if any, as the Board of Directors, in
its discretion from time to time may grant, and at such price as the Board of
Directors in its discretion may fix; and the Board of Directors may issue
shares of any class of the Corporation or other securities convertible into
or carrying options or warrants to purchase shares of any class without
offering any such shares of any class, either in whole or in part, to the
existing stockholders of any class.
SEVENTH. The Corporation may from time to time determine whether and to
what extent, and the times and places and upon what conditions, the books,
records and assets of the Corporation, or any of them (other than the stock
ledger), shall be open to inspection by the stockholders, and no stockholder
shall have any right to inspect any account, book or document of the
Corporation, except as conferred by law or by resolution of the Board of
Directors or stockholders.
EIGHTH. The Corporation shall have perpetual existence.
NINTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for monetary damages
for breach of fiduciary duty as a director or officer, except that this Article
does not eliminate or limit the liability of a director or officer for: (i) an
act or omission that involves intentional misconduct, fraud or a knowing
violation of the law; (ii) an act or omission for which the liability of a
director or officer is expressly provided for by an applicable statute,
including the liability for payment of distributions in violation of Section
78.300 of the Nevada Revised Statutes; or (iii) any other act, omission,
transaction or breach of duty as to which any applicable statute, rule or
regulation provides that the liability of directors or officers may not be
eliminated or limited. If the Nevada Revised Statutes or other applicable
laws (collectively, "Laws") hereafter are amended to authorize the further
elimination or limitation of the liability of directors or officers, then
the liability of a director or officer of the Corporation, in addition
to the limitation on personal liability provided herein, shall be limited
to the fullest extent permitted by the amended Laws. No amendment to or
repeal of this Article shall apply to or have any effect on the liability
or alleged liability of any director or officer of the Corporation for or
with respect to any acts or omissions of such director or officer occurring
prior to such amendment or repeal.<PAGE>
Petroleum Development Corporation
Proxy Solicited by the Board of Directors For Annual Meeting of Stockholders
The undersigned hereby appoints JAMES N. RYAN and DALE G. RETTINGER or either
of them, proxies, each with full power to act without the other and with full
power of substitution for and in the name of the undersigned at the Annual
Meeting of Stockholders of Petroleum Development Corporation (the "Company")
to be held on July 31, 1997 at 10:00 A.M. and at any adjournment thereof to
vote all shares of the Common Stock of the Company, held by the undersigned
with respect to the following questions and on such other matters as may
properly come before the meeting.
(1) ELECTION OF DIRECTORS
FOR all nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below
James N. Ryan, Vincent F. D'Annunzio
(INSTRUCTION: To withhold authority to vote for any nominee, circle that
nominee's name above.
(2) To consider and approve the amendment and restatement of the Company's
Articles of Incorporation to increase the number of authorized shares of the
Company's Common Stock, to repeal the authorized but unissued Class A Common
Stock of the Company and to otherwise consolidate and conform the Articles of
Incorporation and all amendments thereto to existing Nevada law.
FOR AGAINST ABSTAIN
(3) To consider and approve an amendment to the Company's Articles of
Incorporation to provide for certain limitations of personal liability of
directors and officers of the Company in the management of the Company's
business.
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN
(4) To ratify and approve the selection of independent public accountants
for the Company for the fiscal year ending December 31, 1998.
FOR AGAINST ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement for such meeting dated July 31, 1998 and a
copy of the Company's 1997 Annual Report.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL
BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS INDICATED, IT WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
, 1998
(Please sign EXACTLY as your name appears hereon)
when signing as a representative capacity, please
give full title.
IMPORTANT INFORMATION IS CONTAINED ON OTHER SIDE OF THIS CARD, PLEASE READ BOTH
SIDES OF THIS CARD, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
