<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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
UNIT CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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:
___________________________________________________________________________
Notes:
<PAGE>
UNIT CORPORATION
__________
Notice of Annual Meeting
and
Proxy Statement
__________
Annual Meeting of Shareholders
May 1, 1996
<PAGE>
TABLE OF CONTENTS
_________________
CHAIRMAN'S LETTER.......................................... 1
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS................... 2
PROXY STATEMENT............................................ 4
General Information................................... 4
Expenses of Solicitation......................... 4
Revocability of Proxies.......................... 5
Manner of Voting Proxies......................... 5
Item No. 1 Election of Directors...................... 6
Board of Directors and Committees................ 10
General................................ 10
Committees of the Board................ 10
Compensation........................... 11
Executive Compensation........................... 12
Summary Compensation Table............. 12
Option/SAR Grants in 1995.............. 13
Aggregate Option/SAR Exercises in
1995 and Option Values at
December 31, 1995................. 14
Long Term Incentive Plan Awards........ 14
Pension Plans.......................... 14
Change-In-Control Arrangements......... 15
Report of Compensation Committee of
The Board of Directors on
Executive Compensation............ 15
Voting Securities and Common Stock Ownership
of Directors and Management................. 18
Stock Performance Graph.......................... 19
(i)
<PAGE>
Compensation Committee Interlocks
and Insider Participation................... 20
Item No. 2. Ratification of Selection
of Independent Accountants....................... 21
Other Matters......................................... 21
Certain Transactions Between the Company
and Its Officers, Directors, Nominees
for Directors and Their Associates.......... 21
Voting Securities and Common Stock Ownership of
Certain Beneficial Owners................... 22
Compliance with Section 16(a) of the
Exchange Act................................ 23
Matters Which May Come Before The Meeting........ 24
Submission of Shareholder Proposals.............. 24
(ii)
<PAGE>
Dear Shareholders:
On behalf of the Board of Directors and management, I
would like to invite you to attend Unit Corporation's
Annual Meeting of Shareholders to be held on Wednesday, May
1, 1996, at 11:00 a.m., in the Green Room on the ninth
floor of the Bank of Oklahoma Tower, One Williams Center,
Tulsa, Oklahoma.
By attending the meeting you will have an opportunity
to hear a report on the operations of the Company and to
meet our directors and officers.
Information about the meeting, including the various
matters on which you, as our shareholders, will act may be
found in the attached Notice of Annual Meeting of
Shareholders and Proxy Statement.
Whether or not you plan to attend the meeting in
person, it is important that your shares be represented and
voted. Please sign, date and return the enclosed proxy in
the envelope provided.
I look forward to your participation and thank you for
your continued support.
Sincerely,
King P. Kirchner
Chairman and Chief
Executive Officer
1
<PAGE>
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 1, 1996
TO THE SHAREHOLDERS OF UNIT CORPORATION:
The Annual Meeting of Shareholders of Unit Corporation, a Delaware
corporation (the "Company"), will be held in the Green Room on the ninth
floor of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma,
on Wednesday, May 1, 1996, at 11:00 a.m., local time, for the following
purposes:
Item No. 1 To elect three Class III Directors, comprising the
members of the class of directors whose terms expire at the Annual
Meeting, for a three-year term expiring in 1999;
Item No. 2 To ratify the selection of Coopers & Lybrand L.L.P.,
Tulsa, Oklahoma, as independent certified public accountants for the
Company for its fiscal year 1996;
and to transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on March 13,
1996 as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on the record date
are entitled to notice of and to vote at the Annual Meeting. A complete
list of such shareholders will be open for examination by any shareholder
for any purpose germane to the meeting at the Company's office at 1000
Kensington Tower I, 7130 South Lewis, Tulsa, Oklahoma 74136, for a period
of ten days prior to the meeting.
2
<PAGE>
The Company's Proxy Statement and Annual Report are submitted
herewith.
By Order of the Board of Directors
Mark E. Schell
Secretary and
General Counsel
Tulsa, Oklahoma
March 25, 1996
YOUR VOTE IS IMPORTANT
EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO DATE,
SIGN AND PROMPTLY RETURN YOUR ENCLOSED PROXY SO THAT YOUR SHARES MAY
BE VOTED IN ACCORDANCE WITH YOUR WISH AND IN ORDER THAT THE PRESENCE
OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT
YOUR RIGHT TO TIMELY REVOKE IT LATER OR VOTE YOUR SHARES IN PERSON IN
THE EVENT YOU SHOULD ATTEND THE MEETING.
3
<PAGE>
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS MAY 1, 1996
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the management and Board of Directors of Unit Corporation
(the "Company") to be used at the Annual Meeting of Shareholders to be
held Wednesday, May 1, 1996, at 11:00 a.m., local time, in the Green Room
on the ninth floor of the Bank of Oklahoma Tower, One Williams Center,
Tulsa, Oklahoma and all adjournment(s) thereof, for the purposes set forth
in the copy of the Notice of Annual Meeting which precedes this Proxy
Statement. The Company's executive offices are located at 1000 Kensington
Tower I, 7130 South Lewis, Tulsa, Oklahoma 74136. The approximate date
upon which this Proxy Statement, the accompanying proxy card and the
Company's Annual Report to Shareholders are being mailed to shareholders
is March 25, 1996.
At the close of business on March 13, 1996, there were 21,009,635
outstanding shares of the Common Stock, par value $.20 per share, of the
Company ("Common Stock"), the holders of which are entitled to one vote
per share on all matters. There is no other class of securities of the
Company entitled to vote at the meeting. Only shareholders of record at
the close of business on March 13, 1996 will be entitled to vote at the
Annual Meeting.
EXPENSES OF SOLICITATION
The expenses in connection with the solicitation of proxies,
including the cost of preparing, handling, printing and mailing the Notice
of Annual Meeting, Proxy Statement and form of proxy, have been or will
be borne by the Company. The Company may reimburse banks, brokerage
houses and other custodians, nominees and fiduciaries for reasonable
expenses incurred in sending proxy material to their principals to obtain
authorization for the execution of proxies.
4
<PAGE>
Directors, officers and other employees of the Company may solicit
proxies personally, by telephone or telegram from some shareholders if
proxies are not received promptly. In addition, the firm of Regan &
Associates, Inc., New York, New York, has been retained to assist in the
solicitation of proxies at a fee of $3,500, plus expenses.
REVOCABILITY OF PROXIES
The form of proxy enclosed is for use at the Annual Meeting if a
shareholder is unable to attend or does not desire to vote in person. At
any time before the shares represented by the proxy are voted at the
Annual Meeting, the shareholder may revoke the proxy by delivering to the
Secretary of the Company a written revocation of proxy or by the
shareholder's affirmatively electing to vote in person while in attendance
at the Annual Meeting.
MANNER OF VOTING PROXIES
The accompanying proxy card is designed to permit each shareholder
of record at the close of business on March 13, 1996 to vote in the
election of directors and on the proposals described in this statement.
With respect to the election of directors, the proxy card provides
space for a shareholder to withhold voting for any or all nominees for the
Board of Directors or to abstain from voting for any proposal if the
shareholder chooses to do so. Under the provisions of the Delaware
General Corporation law and the Company's By-laws, a majority of the
shares of Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the Annual Meeting. In all matters
other than the election of directors, the affirmative vote of the majority
of shares present in person or represented by proxy at the Annual Meeting
and entitled to vote on the subject matter shall be the act of the
shareholders. Abstentions are treated as votes against a proposal and
broker non-votes have no effect on the vote. Directors shall be elected
by a plurality of the votes present in person or represented by proxy at
the Annual Meeting and entitled to vote on the election of directors.
All shares represented by valid proxies received prior to the
meeting, and not revoked, will be voted. Shares represented by the proxy
will be voted in accordance with the instructions on the proxy.
If the proxy is signed and returned to the Company but no
instructions are given, the proxies intend to vote the shares represented
thereby to approve Items numbered 1 and 2, as set forth in the
5
<PAGE>
accompanying Notice of Annual Meeting of Shareholders. Although the Board
of Directors does not contemplate that any of its nominees will be
unavailable for election, in the event of a vacancy in the slate of
nominees it is presently intended that the proxy will be voted for the
election of a nominee who will be selected by the Board of Directors. As
to any other business that may properly come before the meeting, including
all matters incident to the conduct of the meeting, it is intended that
the proxy will be voted in respect thereof in accordance with the judgment
of the person voting the proxies.
ITEM NO. 1 ON THE PROXY CARD
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes - Class I, Class
II and Class III - with each class being as equal in size as possible and
with the term of office of each class ending in successive years. There
are currently eight members of the Board of Directors, two members in
Class I and three members in Class II and Class III. The terms of office
of Class III will expire with this Annual Meeting of Shareholders. The
terms of the directors of Class I and Class II do not expire until 1997
and 1998, respectively, and, consequently, their successors are not to be
elected at this Annual Meeting. The three members of Class III, King P.
Kirchner, Don Cook and Don Bodard, have been nominated for re-election.
These nominees will, if elected, serve three years until their successors
are duly elected and qualified.
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE BOARD OF DIRECTORS'
NOMINEES FOR CLASS III. PROXIES SOLICITED HEREBY WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
Following is certain information about each nominee - incumbent and
those Directors whose terms of office will continue after the Annual
Meeting.
6
<PAGE>
NOMINEES FOR TERMS EXPIRING IN 1999
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)
- ---------------- --- ---------------------------- -------- -----------------
King P. Kirchner 68 Chairman of the Board of 1963 1,321,758 (2)
Directors of the Company
and Chief Executive Officer.
Don Cook 71 Member of the Audit and 1963 16,138 (3)
Compensation Committees.
Retired Partner with the
accounting firm of
Finley & Cook.
Don Bodard 76 Chairman of the Board of 1994 1,682,928 (3)
Directors of Ameribank,
Shawnee, Oklahoma.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)
- -------------- --- ---------------------------- -------- -----------------
John G. Nikkel 61 President and Chief 1983 394,666 (4)
Operating Officer.
John S. Zink 67 Member of the Audit and 1982 51,000 (3)
Compensation Committees.
Founder of Zeeco Inc.,
Tulsa, Oklahoma.
7
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)
- ------------- --- ---------------------------- -------- -----------------
Earle Lamborn 61 Senior Vice President- 1979 336,291 (5)
Drilling.
William B. Morgan 51 Member of the Audit 1988 20,000 (3)
Committee. Executive
Vice President and General
Counsel of St. John Medical
Center, Inc.
John H. Williams 77 Member of the Compensation 1988 11,000 (3)
Committee. Retired in 1978
as Chairman and Chief
Executive Officer of The
Williams Companies of Tulsa,
Oklahoma.
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996. For purposes of calculating the percent of
the shares outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996, pursuant to the exercise of
outstanding warrants or stock options.
(2) Includes 5,932 shares of Common Stock held under the Company's 401(k)
thrift plan as of December 31, 1995. Of the shares listed, Mr. Kirchner
disclaims any beneficial interest in 8,828 shares.
(3) Includes unexercised stock options under the Company's Non-Employee
Directors' Stock Option Plan, to each of the following which may be
exercised at the discretion of the holder: Don Cook, 10,000; William B.
Morgan, 10,000; John H. Williams, 10,000; John S. Zink, 10,000; Don Bodard,
2,500; all non-Employee Directors as a group, 42,500.
(4) Includes 175,500 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder; 26,252 shares held under the Company's 401(k) thrift plan as of
December 31, 1995; and 28,560 shares held by a private company over which
Mr. Nikkel has voting and investment power. Of the shares listed, Mr.
Nikkel disclaims any beneficial interest in 76,000 shares.
8
<PAGE>
(5) Includes 96,000 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder and 7,831 shares held under the Company's 401(k) thrift plan as
of December 31, 1995. Of the shares listed, 232,460 are held in trust for
Mr. Lamborn's wife for her benefit and Mr. Lamborn disclaims beneficial
interest in such shares.
Mr. Lamborn has been actively involved in the oil field for over 40
years, joining the Company's predecessor in 1952 prior to its becoming a
publicly-held corporation. He was elected Vice President, Drilling in
1973 and to his current position as Senior Vice President and Director in
1979.
Mr. Morgan was elected a director of the Company in February, 1988.
Mr. Morgan has been Executive Vice President and General Counsel of St.
John Medical Center, Inc., Tulsa, Oklahoma, since March 1, 1995. Prior
thereto, he was a Partner in the law firm of Doerner, Saunders, Daniel &
Anderson, Tulsa, Oklahoma.
Mr. Williams was elected a director of the Company in December of
1988. Prior to retiring on December 31, 1978, he was Chairman of the
Board and Chief Executive Officer of The Williams Companies, Inc.
Mr. Kirchner, a co-founder of the Company, has been the Chairman of
the Board and a director since 1963 and was President until November,
1983. Mr. Kirchner is a Registered Professional Engineer within the State
of Oklahoma, having received degrees in Mechanical Engineering from
Oklahoma State University and in Petroleum Engineering from the University
of Oklahoma.
Mr. Nikkel joined the Company in 1983 as its President and a
director. From 1976 until January 1982 when he co-founded Nike
Exploration Company, Mr. Nikkel was an officer and director of Cotton
Petroleum Corporation, serving as the President of the Company from 1979
until his departure. Prior to joining Cotton, Mr. Nikkel was employed by
Amoco Production Company for 18 years, last serving as Division Geologist
for Amoco's Denver Division. Mr. Nikkel presently serves as President and
a director of Nike Exploration Company. Mr. Nikkel received a Bachelor
of Science degree in Geology and Mathematics from Texas Christian
University.
Mr. Zink was elected a director of the Company in May, 1982. He is
a principle in several privately held companies engaged in the businesses
of designing and manufacturing equipment used in the petroleum industry,
construction and heating and air conditioning services and installation.
He holds a Bachelor of Science degree in Mechanical Engineering from
9
<PAGE>
Oklahoma State University. He is also a director of Liberty Bankcorp,
Tulsa and Oklahoma City, Oklahoma and Matrix Service Company, Tulsa,
Oklahoma.
Mr. Cook has served the Company as a director since the Company's
inception. He is a Certified Public Accountant and a retired partner in
the accounting firm of Finley & Cook, Shawnee, Oklahoma.
Mr. Bodard, a co-founder of the Company, served as a Director from
1963 until February, 1988 when he resigned. From February, 1988 until
August 23, 1994, when Mr. Bodard was again elected a Director of the
Company, he served as a Consultant to the Board of Directors. He is
Secretary-Treasurer of Bodard & Hale Drilling Company, an Oklahoma based
drilling company, President of Bodard Drilling Company, Inc., an Oklahoma
based oil service company, and owner of Bodard Equipment Company, a sole
proprietorship, of Shawnee, Oklahoma. He is also Chairman of the Board
of Ameribank, Shawnee, Oklahoma.
BOARD OF DIRECTORS AND COMMITTEES
General
- -------
The business of the Company is managed under the direction of the
Board of Directors. The Board meets on a regularly scheduled basis during
the Company's fiscal year to review significant developments affecting the
Company and to act on matters requiring Board approval. It also holds
special meetings when an important matter requires Board action between
scheduled meetings. The Board of Directors held six regular meetings
during fiscal 1995. No director attended fewer than 75% of the aggregate
of the total of such meetings and of the committees of the Board on which
he served during the fiscal year.
Committees of the Board
- -----------------------
The Board of Directors has established standing Audit and
Compensation committees. The membership of each of these committees is
determined from time to time by the Board. The Audit Committee appoints
the independent auditors subject to ratification by the Board, meets with
the independent auditors to review with them the scope and results of
their audit of the Company's financial statements and consults with the
Company's personnel to determine the adequacy of internal accounting
controls. The Compensation Committee determines the salaries payable to
the Company's officers and authorizes grants of stock options. Only
directors who are not officers of the Company serve on the Audit and
10
<PAGE>
Compensation Committees. The Audit Committee met two times and the
Compensation Committee met one time during the fiscal year ended December
31, 1995.
In addition to its standing Audit and Compensation Committees, the
Board of Directors may, from time to time, appoint members to a special
committee to assist or otherwise make recommendations to the full Board
of Directors. One such committee was formed in late 1994 and met one time
during 1995. Its members were comprised entirely of non-employee
directors. This committee was responsible for evaluating the Company's
current Articles of Incorporation, By-laws and other related matters and,
if deemed advisable, making recommendations relating thereto to the full
Board of Directors. This committee completed its task in 1995 and was
subsequently dissolved.
Compensation
- ------------
Committee members are paid an annual retainer fee of $2,000 per
standing committee served upon and $500 for any committee meetings
attended. Directors of the Company (other than officers) are paid
attendance fees of $750 per meeting attended and an annual retainer fee
of $10,000 payable quarterly.
On May 6, 1992, the Company's shareholders approved the Unit
Corporation Non-Employee Directors' Stock Option Plan (the "Plan")
providing for the granting of options for up to an aggregate of 100,000
shares of Common Stock of the Company, subject to adjustment in certain
events, to members of the Board of Directors who are not employees of the
Company or any subsidiary (a "non-Employee Director"). Automatic grants
of options to purchase 2,500 shares of the Company's Common Stock are made
to each non-Employee Director on the first business day following each
annual meeting of shareholders of the Company from May 1992 to May 2002.
The option price will be the fair market value of the Company's Common
Stock on the date of grant. Payment may be made in cash or in shares of
Company Common Stock that have been held by the director for at least one
year. No stock option may be exercised during the first six months of its
term except in the case of death.
Each option extends for 10 years from the date of grant. If any
optionee's service as a director terminates for any reason other than
death, resignation or removal for cause, any unexpired option which is
then exercisable will remain exercisable for a period of one year
following the date of termination. If a non-Employee Director dies while
in office, the option will be exercisable for two years following the date
11
<PAGE>
of death whether or not the option was exercisable at such date. If a
non-Employee Director dies after ceasing to be a director and during a
period when a stock option is exercisable, the option will be exercisable
for one year after the date of death. If a non-Employee Director resigns
or is removed from office for cause, any option which is not yet
exercisable will be forfeited, and any exercisable option must be
exercised within 90 days.
The Plan may be terminated at any time or may, from time to time, be
modified or amended by the Board of Directors except the Plan provisions
shall not be amended more than once every six months other than to comport
with changes in the Internal Revenue Service Code or the rules thereunder
or to assure that stock options granted under the Plan qualify for the
exemption provided by Rule 16b-3 of the Securities Exchange Act of 1934.
In 1995 stock options were granted for an aggregate of 12,500 shares at
$3.375 per share. An aggregate of 42,500 shares are currently subject to
outstanding options. None of these options have been exercised.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth information with respect to the
compensation of the Chief Executive Officer and each of the other four
most highly compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries in 1993, 1994, and
1995.
12
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation(1) Awards Payouts
---------------------------- ----------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Name Annual Restricted Under- All Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payout sation
Position(s) Year ($) ($) ($)(2) ($) SARs (#) ($) ($)(3)
- ---------------- ---- --------- -------- ------- ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
King P. Kirchner 1995 $ 200,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 4,485
Chairman and CEO 1994 200,000 0 0 0 0 0 3,231
1993 170,000 8,333 0 0 0 0 3,231
John G. Nikkel 1995 210,000 61,666 6,391 0 0 0 4,485
President and COO 1994 200,000 43,333 1,554 0 22,500 0 4,786
1993 200,000 38,333 2,998 0 22,500 0 4,787
Earle Lamborn 1995 115,000 25,000 2,718 0 0 0 4,186
Sr. Vice President - 1994 110,000 15,000 1,252 0 10,000 0 2,495
Drilling 1993 103,333 17,000 2,669 0 7,500 0 1,502
Philip M. Keeley 1995 155,000 28,800 8,056 0 0 0 4,485
Sr. Vice President - 1994 150,000 23,333 376 0 10,000 0 3,358
Exploration & 1993 150,000 18,666 2,390 0 7,500 0 2,496
Production
Larry D. Pinkston 1995 105,000 17,000 0 0 0 0 3,033
V. P., CFO 1994 100,000 14,000 0 0 7,500 0 2,150
and Treasurer 1993 92,000 14,000 0 0 7,500 0 2,151
</TABLE>
(1) Compensation deferred at the election of an executive is included in the
year earned.
(2) The amount listed under the Other Annual Compensation column represents the
dollar value associated with the use of a Company vehicle by the named
executive officer.
(3) "All Other Compensation" represents the Company matching contributions to
the Company 401(k) thrift plan for the named executive officer.
Option/SAR Grants in 1995
- -------------------------
There were no individual grants of stock options during 1995 to any
of the named executive officers of the Company.
13
<PAGE>
Aggregate Option/SAR Exercises in 1995 and Option Values at December 31, 1995
- -----------------------------------------------------------------------------
The following table provides information as to options exercised by
each of the named executive officers in 1995 and the value of options held
by such executives at year end measured in terms of the fair market value
of the Common Stock on December 29, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Shares Securities Value of
Acquired Underlying Unexercised
on Value Unexercised In-the-Money
Exercise Realized Options/SARs at Options/SARs at
Name (#) ($)(1) FY-End (#) FY-End ($)(2)
- ---------------- -------- ----------- ------------------------ ----------------------------
Exercisable Unexercised Exercisable Unexercisable
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
King P. Kirchner 0 $ 0.00 0 0 $ 0 $ 0
John G. Nikkel 38,000 $ 64,750.00 230,500 41,500 $ 617,512 $ 77,112
Earle Lamborn 0 $ 0.00 96,000 16,500 $ 248,080 $ 30,457
Philip M. Keeley 17,100 $ 28,800.00 148,900 16,500 $ 413,392 $ 30,457
Larry D. Pinkston 0 $ 0.00 32,500 12,500 $ 76,102 $ 22,697
</TABLE>
(1) Value realized equals fair market value of the stock on date of exercise,
less the exercise price, times the number of shares acquired. Taxes must
be paid by the individual on the value realized.
(2) The value of unexercised in-the-money options at year end assumes a fair
market value for the Company's Common Stock of $4.625, the average of the
high and low prices of the Company's Common Stock on December 29, 1995.
Value is calculated on the basis of the difference between the option
exercise price and $4.625 multiplied by the number of shares of Common
Stock underlying the options.
Long Term Incentive Plan Awards
- -------------------------------
The Company does not currently have any Long Term Incentive Plans.
Pension Plans
- -------------
The Company does not currently have any Pension Plans.
14
<PAGE>
Change-In-Control Arrangements
- ------------------------------
The Unit Corporation Stock Option Plan contains a provision whereby
all stock options will automatically become fully vested and immediately
exercisable without the requirement of any further act by the Company or
participant in the event of a "change of control" of the Company. A
"change-in-control" is deemed to have occurred at such time as any person
(as such term is used in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934, as amended), other than the Company or an Exempt
Person, is or becomes the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended), directly or indirectly,
of securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities. An Exempt
Person is generally defined to be any person (or estate or trust of such
person) who, on the date of the plan, owned securities of the Company
representing more than 20% of the combined voting power of the Company's
then outstanding securities, and any spouse, parent or issue of such
person.
Report of the Compensation Committee of the
- -------------------------------------------
Board of Directors on Executive Compensation
- --------------------------------------------
The disclosure contained in this section of the Proxy Statement
should not be incorporated by reference into any prior filing by the
Company under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that incorporated future filings or portions thereof (including
this proxy statement or the "Executive Compensation" section of this proxy
statement).
The Committee is responsible for setting and overseeing the
compensation of the Company's executive officers. The Compensation
Committee of the Board of Directors is composed entirely of independent
outside directors. Furthermore, there are no interlocking relationships
between any executive officers of the Company and any entity whose
directors or executive officers serve on the Committee. The members of
the Committee are John S. Zink, Don Cook and John H. Williams.
Objectives and Considerations - The general objectives of the
Compensation Committee in determining executive compensation are to
attract, retain and reward qualified individuals serving as executive
officers of the Company. To achieve these objectives, the Committee
relies primarily on salary, annual bonuses (awardable either in stock or
cash) and awards under the Company's stock option plan, with the last two
being variable. In making its decisions, the Committee takes into account
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the conditions within the Company's industry, the generation of income and
cash flow by the Company and its various subsidiaries and the attainment
of any designated business objectives. Individual performances are also
reviewed, taking into account the executive officer's responsibilities,
experience and potential, his or her period of service and current salary
and compensation levels as compared to similar positions at other
companies. The Committee's evaluation of these considerations is
primarily subjective and, to-date, it has not established any specific
written compensation plans or formulas pursuant to which the executive
officers' annual compensation is determined.
Base Salary - The Company does not currently have an employment
agreement with any of the executive officers. In determining the base
salaries for the executive officers for 1995 the Committee relied
primarily on its evaluation of the responsibilities of the position as
compared with other executive positions in the marketplace. In doing so,
the Committee relied, to a large extent, on the Peat Marwick Oil and Gas
Corporation Survey 1994 Report which surveyed the compensation and benefit
programs of ninety-three oil and gas related companies, one of which was
the Company. It was the Committee's objective to set the executives' base
salary at approximately the competitive mid-range reflected in the survey.
Within this established range structure, the Committee then approved any
changes in amounts of executive compensation based on individual
performance evaluations. Taking these factors into consideration, the
Committee, with the exception of Mr. Kirchner's salary which is discussed
below, decided to increase the salaries of each of the named executive
officers by 5% with the exception of Mr. Keeley whose salary was increased
by 3%.
Bonuses - Executive officers are eligible to earn annual bonuses
either in cash or in stock. Stock bonuses are awarded pursuant to the
Company's Employee Bonus Plan approved by the Company's shareholders on
May 1, 1985 and amended on May 3, 1995. The amount and type of any
bonuses awarded to executive officers is determined solely at the
subjective discretion of the Committee. The Committee does not base its
decisions on predetermined formulas, choosing instead to rely on its
evaluation of the various considerations set forth above. In addition,
when appropriate, bonuses are awarded to recognize short-term individual
performance.
Stock Options - The stock options granted under the Company's Stock
Option Plan, approved by the Company's shareholders on May 2, 1985 and
amended on May 3, 1989 and May 3, 1995, provide an incentive for executive
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officers to manage with a view to maximization of long-term shareholder
value. Historically, although not required, stock option grants are made
at 100% of the market price on the date of grant and are exercisable in
annual 20% increments after one year and have a ten year life. The number
of options that are granted to an executive officer are based on the
individual's performance and level of responsibility. Option awards will
vary in size based on position level (more senior managers receive a
higher multiple). Stock Options are granted to the executive officers at
the discretion of the Committee. The Committee's decisions with respect
to awarding stock options are generally made late each year thus allowing
the Committee to evaluate the Company's annual results as part of its
decision making process. The Committee, as part of its evaluation of the
executive officers' compensation for fiscal year 1995, did not award any
stock options to the Company's executive officers. Generally, the decision
whether to grant stock options to the executive officers is based on a
subjective analysis by the Committee of the executive officers' individual
performance rather than any specific Company performance criteria. In
addition, the Committee also takes into consideration the relationship of
the awards to peer, subordinate and superior positions, prior awards and
future performance expectations for the individual executives.
Chief Executive Officer - Mr. Kirchner's salary and bonus are
determined by the Committee substantially in accordance with the policies
described above relating to all executive officers of the Company. Based
on its review, the Committee determined to keep Mr. Kirchner's salary
at its present level.
1993 OBRA - Executive Compensation Tax Deductibility - Beginning in
1995, the Internal Revenue Code, Section 162(m), limits the Company's
ability to deduct, for federal income tax purposes, certain compensation
in excess of $1 million per year paid to individual officers named in the
Summary Compensation Table. Based on the amount of compensation paid to
each of the named officers in fiscal 1995, it does not appear that Section
162(m) will have a significant impact on the Company in the near term.
However, the Committee will continue to monitor whether its executive
compensation plans should be amended to meet the deductibility
requirements of the tax law.
Members of the Compensation Committee:
John S. Zink
Don Cook
John H. Williams
17
<PAGE>
VOTING SECURITIES AND COMMON STOCK OWNERSHIP
OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information, as of March 13,
1996, regarding the beneficial ownership of the Common Stock of the
Company by each nominee for election as a director, each continuing
director, the Company's Chief Executive Officer, each of the Company's
four other most highly compensated executive officers for fiscal 1995 and
the directors and executive officers of the Company as a group.
Name of Beneficial Aggregate Number of Percent of Outstanding
Owner Beneficially Owned Common Stock (1)
Shares
- ------------------ ------------------- ----------------------
King P. Kirchner 1,321,758 (2)(3) 6.29
Don Cook 16,138 (4) *
Earle Lamborn 336,291 (2)(3)(5) 1.59
William B. Morgan 20,000 (4) *
John G. Nikkel 394,666 (2)(3)(5)(6) 1.86
John H. Williams 11,000 (4) *
John S. Zink 51,000 (4) *
Don Bodard 1,682,928 (4) 8.0
Philip M. Keeley 247,530 (2)(5)(6)(7) 1.16
Larry D. Pinkston 120,840 (2)(3)(5) *
All Directors and 4,253,655 (2)-(7) 19.78
Officers as a Group
* Less than 1%
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996. For purposes of calculating the percent of
the Common Stock outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996, pursuant to the exercise of
outstanding warrants or stock options.
(2) Includes shares of Common Stock held under the Company's 401(k) thrift plan
as of December 31, 1995, the latest valuation available at the time this
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<PAGE>
Proxy Statement was prepared, for the account of: King P. Kirchner, 5,932;
Earle Lamborn, 7,831; John G. Nikkel, 26,252; Philip M. Keeley, 32,781;
Larry D. Pinkston, 11,375; and Directors and Officers as a group, 91,664.
(3) Of the shares listed as being beneficially owned, the following individuals
disclaim any beneficial interest in shares held by spouses or for the
benefit of family members: King P. Kirchner, 8,828; John G. Nikkel 76,000;
Earle Lamborn, 232,460; and Larry D. Pinkston, 2,000.
(4) Includes unexercised stock options under the Company's Non-Employee
Directors' Stock Option Plan, to each of the following which may be
exercised at the discretion of the holder: Don Cook, 10,000; William B.
Morgan, 10,000; John H. Williams, 10,000; John S. Zink, 10,000; Don Bodard,
2,500; all non-Employee Directors as a group, 42,500.
(5) Includes unexercised stock options under the Company's Stock Option Plan,
to each of the following, which may be exercised within 60 days at the
discretion of the holder: Earle Lamborn, 96,000; John G. Nikkel 175,500;
Philip M. Keeley, 148,900; Larry D. Pinkston, 32,500; and Directors and
Officers as a group, 485,400.
(6) Includes 28,560 shares and 11,440 shares beneficially owned by Mr. Nikkel
and Mr. Keeley, respectively, held by a private company over which Mr.
Nikkel and Mr. Keeley have voting and investment power.
(7) Includes 2,100 Warrants to purchase 2,100 shares of the Company's Common
Stock.
STOCK PERFORMANCE GRAPH
The graph and the related disclosure contained in this section of the
Proxy Statement should not be incorporated by reference into any prior
filings by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that incorporated future filings or portions thereof
(including this proxy statement or the "Executive Compensation" section
of this proxy statement).
The following graph reflects a comparison of the cumulative total
return (change in stock price plus reinvested dividends, assuming $100
invested on December 31, 1990) of the Common Stock of the Company from
December 31, 1990 through December 31, 1995 with the Standard & Poor's 500
Composite Index, S&P Oil and Gas Drilling and S&P Oil - Integrated
Domestic Indexes. The comparisons in this table are required by the
Securities and Exchange Commission and, therefore, are not intended to
forecast or be indicative of possible future performance of the Company's
stock.
19
<PAGE>
[graph]
Dollar Value of $100 Investment at December 31,
-----------------------------------------------------
1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- -------
The Company $100.00 $ 53.85 $ 53.85 $ 84.62 $ 92.31 $146.15
S&P 500 $100.00 $130.47 $140.41 $154.56 $156.60 $215.45
S&P Oil-Integ. $100.00 $ 93.48 $ 95.47 $100.59 $105.54 $120.16
S&P O&G $100.00 $ 61.56 $ 81.94 $ 94.52 $ 75.79 $104.34
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, the members of the Compensation Committee were
responsible for determining executive compensation, including decisions
relating to stock option grants to executive officers. None of the
executive officers of the Company are members of the Compensation
Committee.
20
<PAGE>
ITEM NO. 2 ON THE PROXY CARD
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, based on the recommendation of the Audit
Committee, has unanimously selected Coopers & Lybrand L.L.P. (formerly
known as Coopers & Lybrand) as the independent certified public
accountants for the Company for its 1996 fiscal year. The Board of
Directors is asking the shareholders to ratify and approve this action.
A representative of Coopers & Lybrand L.L.P., who will attend the Annual
Meeting, will have the opportunity to make a statement if he or she
desires to do so and will be available to answer appropriate questions.
Although such ratification is not required by law, the Board of
Directors believes that shareholders should be given the opportunity to
express their views on this matter. Failure to ratify such selection is
not binding on the Board of Directors.
THE BOARD OF DIRECTORS DEEMS ITEM NO. 2 TO BE IN THE BEST INTEREST
OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL,
WHICH VOTE SHALL ALSO ACT TO RATIFY THE SELECTION OF COOPERS & LYBRAND,
L.L.P.
OTHER MATTERS
CERTAIN TRANSACTIONS BETWEEN THE COMPANY AND ITS OFFICERS,
DIRECTORS, NOMINEES FOR DIRECTORS AND THEIR ASSOCIATES
Since 1984 one of the subsidiaries of the Company, or its
predecessor, has formed certain employee limited partnerships for
investment by certain of the employees and directors of the Company and
its subsidiaries. The limited partnerships participate with Unit
Petroleum Company, a subsidiary of the Company, in its exploration and
production operations. During the period commencing with the past fiscal
year, Mr. John Nikkel, a Director and the President of the Company,
invested $54,000 in the Unit 1995 Oil and Gas Limited Partnership and
invested $50,000 in the Unit 1996 Oil and Gas Limited Partnership. In
addition, Nike Exploration Company, which is owned 71.4% by Mr. Nikkel,
invested $55,000 and $80,000, respectively, in each of these two employee
programs.
Mr. Don Bodard, a director of the Company, is the majority
shareholder and Chairman of the Board of Directors of Ameribank, the
21
<PAGE>
parent company of American National Bank and Trust Company of Shawnee,
Shawnee, Oklahoma ("American National"). American National is a
participating bank in the Company's bank credit agreements. American
National's participation is governed by the terms and conditions of an
intercreditor agreement executed by and between all of the participating
banks.
VOTING SECURITIES AND COMMON STOCK OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of March 13,
1996, regarding the only persons known by the Company to own, directly or
indirectly, five percent or more of the outstanding shares of Common Stock
of the Company.
Percent of
Name and Address of Amount and Nature of Outstanding
Beneficial Owner Beneficial Ownership Common Stock(1)
- ----------------------- -------------------- ---------------
King P. Kirchner
1000 Kensington Tower I 1,321,758 (2) 6.29
7130 South Lewis
Tulsa, Oklahoma 74136
Don Bodard
P.O. Box 1089 1,682,928 (3) 8.00
Shawnee, Oklahoma 74802
Scottish Amicable Life
Assurance Society 1,326,100 (4) 6.31
7 Hanover Square
New York, NY 10004
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor 1,334,300 (5) 6.35
Santa Monica, California 90401
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996. For purposes of calculating the percent of
the Common Stock outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996, pursuant to the exercise of
outstanding warrants or stock options.
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<PAGE>
(2) Includes 5,932 shares of Common Stock held under the Company's 401(k)
thrift plan as of December 31, 1995. Of the shares listed, Mr. Kirchner
disclaims any beneficial interest in 8,828 shares.
(3) Includes 2,500 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder.
(4) This information is based on the most recent amendment, dated August 30,
1994, to the Schedule 13D filed with the Securities and Exchange Commission
by Scottish Amicable Life Assurance Society ("Life Assurance"), Scottish
Amicable Pension Investments Ltd. ("Pension"), Scottish Amicable Exempt
American Trust (previously known as Scottish Amicable International Exempt
Unit Trust) ("Unit Trust") and Scottish Amicable American Unit Trust
("American Trust"). Life Assurance holds sole voting and sole disposition
power over 567,900 shares of Common Stock and shared voting power over
818,200 shares of Common Stock of which 300,000 shares are issuable upon
conversion of Warrants. It is deemed to hold beneficial ownership
of 1,326,100 shares of Common Stock of which 300,000 shares are issuable
upon conversion of Warrants. Unit Trust holds shared voting power over
225,000 shares of Common Stock of which 120,000 shares are issuable upon
conversion of Warrants. Pension holds shared voting power over 250,000
shares of Common Stock of which 125,000 shares are issuable upon conversion
of Warrants. American Trust holds shared voting power over 343,200 shares
of Common Stock of which 55,000 shares are issuable upon conversion of
Warrants.
(5) This information is based on Amendment No. 4 to Schedule 13G, dated
February 7, 1996, filed with the Securities and Exchange Commission by
Dimensional Fund Advisors Inc. ("Dimensional"). Dimensional, a registered
investment advisor, is deemed to have beneficial ownership of 1,334,300
shares of Unit Common Stock as of December 31, 1995, all of which shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers and persons who own more
than 10% of a registered class of the Company's equity securities to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange. Such persons are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it with respect to fiscal 1995, or written representations from certain
23
<PAGE>
reporting persons, the Company believes that all filing requirements
applicable to its directors, officers and persons who own more than 10%
of a registered class of the Company's equity securities have, with one
exception, been complied with. Mr.Nikkel, an executive officer and
Director of the Company, inadvertently failed to report a gift of 23,000
shares of the Company's Common Stock on his Form 5 for the fiscal year
ended December 31,1994. An amendment to the Form 5 reporting the gifted
shares was subsequently filed.
MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors does not intend to bring any other matters
before the meeting, nor does the Company know of any matters which other
persons intend to bring before the meeting. If, however, any other
matters not mentioned in this proxy statement properly come before the
meeting, the persons named in the accompanying proxy card will vote
thereon in accordance with their best judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission now in
effect, in order to be considered for inclusion in the Company's proxy
statement relating to the 1997 Annual Meeting of Shareholders, a
shareholder proposal must be received by the Company at its principal
offices, 1000 Kensington Tower I, 7130 South Lewis, Tulsa, Oklahoma 74136,
addressed to the Secretary of the Company, on or before November 26, 1996.
FORM 10-K ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION
COPIES OF THE ANNUAL REPORT (FORM 10-K) OF THE COMPANY FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1995 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO: MARK E. SCHELL,
SECRETARY, UNIT CORPORATION, P. O. BOX 702500, TULSA, OKLAHOMA 74170.
PLEASE SIGN, DATE AND RETURN YOUR PROXY TO ASSURE THAT ALL OF YOUR
SHARES WILL BE VOTED.
24
<PAGE>
UNIT CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1996
THIS PROXY IS SOLICITED ON BEHALF OF UNIT CORPORATION'S BOARD OF DIRECTORS
P The undersigned hereby appoints King P. Kirchner and Mark E. Schell, and
each of them, proxies for the undersigned, with full power of
R substitution, to vote all shares of Unit Corporation Capital Stock which
the undersigned may be entitled to vote at the Annual Meeting of
O Shareholders of Unit Corporation, Tulsa, Oklahoma, on Wednesday, May 1,
1996 at 11:00 A.M., or at any adjournment thereof, upon the matters set
X forth on the reverse side and described in the accompanying Proxy
Statement and upon such other business as may properly come before the
Y meeting or any adjournment thereof.
Please mark this proxy as indicated on the reverse side to vote on
any item. If you wish to vote in accordance with the Board of
Directors' recommendation, please sign the reverse side; no boxes need
to be checked.
_______________________________________________________________________________
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued, and to be marked, dated & signed on reverse side)
<PAGE>
Please mark
your votes ( )
this way
The Board of Directors recommends a vote FOR items 1 and 2.
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
Item 1 - ELECTION OF ( ) ( ) Item 2 - APPROVAL OF ( ) ( ) ( )
DIRECTORS AUDITORS
Nominees:
King P. Kirchner
Don Cook
Don Bodard
WITHHELD FOR: (Write that nominee's name in the
space provided below).
____________________________________________
PLEASE MARK THIS BOX IF YOU
PLAN TO ATTEND THE MEETING ( )
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change
on the reverse side. ( )
Receipt is hereby acknowledged of
the Unit Corporation Notice of
Meeting and Proxy Statement.
Signature(s)_________________________________ Date: ___________________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
<PAGE>
