<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 Sec. 240.14a-11(c) or Sec. 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
_________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_________________________________________________________________________
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_________________________________________________________________________
(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:
_________________________________________________________________________
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_________________________________________________________________________
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(4) Date Filed:
___________________________________________________________________________
<PAGE>
UNIT CORPORATION
______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
______________________________
Meeting Date: Wednesday, May 5, 1999
Meeting Time: 11:00 a.m.
Meeting Place: Maple Room, Second Floor
Tulsa Marriott Southern Hills Hotel
1902 E. 71st Street
Tulsa, Oklahoma 74136
<PAGE>
TABLE OF CONTENTS
_________________
Page
----
Chairman's Letter. . . . . . . . . . . . . . . . . . . . . . . . (ii)
Notice of Annual Meeting of Stockholders . . . . . . . . . . . .(iii)
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . .1
. Information About the Annual Meeting and Voting . . . . . . .1
. Discussion of Items Recommended by the Board. . . . . . . . .3
. Election of Directors - Item No. 1 on the Proxy Card. . .3
. Ratification of Selection of Independent
Accountants - Item No. 2 on the Proxy Card. . . . . . .6
. Information About Company Common Stock Ownership. . . . . . .6
. Stockholders Who Own at Least 5% of the Company . . . . .6
. Stock Owned by Directors and Executive Officers . . . . .7
. Information About the Board of Directors. . . . . . . . . . .8
. Information Regarding Executive Compensation. . . . . . . . .9
. Summary Compensation Table. . . . . . . . . . . . . . . .9
. Option Grants in 1998 . . . . . . . . . . . . . . . . . 11
. Aggregate Option Exercises in 1998 and
Option Values at December 31, 1998. . . . . . . . . . 12
. Long Term Incentive Plan Awards . . . . . . . . . . . . 12
. Pension Plans . . . . . . . . . . . . . . . . . . . . . 12
. Change-In-Control Arrangements. . . . . . . . . . . . . 12
. Report of the Compensation Committee of the Board
of Directors on Executive Compensation. . . . . . . . 14
. Compensation Committee Interlocks
and Insider Participation . . . . . . . . . . . . . . 15
. Stock Performance Graph . . . . . . . . . . . . . . . . . . 16
. Other Matters . . . . . . . . . . . . . . . . . . . . . . . 17
. Certain Transactions Between the Company
and Its Officers, Directors, Nominees
for Directors and Their Associates. . . . . . . . . . 17
. Compliance with Section 16(a) of the Exchange Act . . . 17
. Matters Which May Come Before the Meeting . . . . . . . 17
. Submission of Stockholder Proposals . . . . . . . . . . 18
. Form 10-K Annual Report to the Securities and
Exchange Commission . . . . . . . . . . . . . . . . . 18
(i)
<PAGE>
Dear Stockholder:
On behalf of the Board of Directors and management, I would like to invite
you to attend our Annual Meeting of Stockholders to be held on Wednesday, May 5,
1999 at 11:00 a.m. Unlike previous years, this year's meeting will be held in
the Maple Room located on the second floor of the Tulsa Marriott Southern Hills
Hotel, 1902 E. 71st Street, 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 a stockholder, will act may be found in the attached Notice of Annual Meeting
of Stockholders 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,
/s/ King P. Kirchner
King P. Kirchner
(ii)
<PAGE>
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 5, 1999
TO THE STOCKHOLDERS OF UNIT CORPORATION:
Unit Corporation, a Delaware corporation (the "Company"), will hold its
Annual Meeting of Stockholders in the Maple Room on the second floor of the
Tulsa Marriott Southern Hills Hotel, 1902 E. 71st Street, Tulsa, Oklahoma, on
Wednesday, May 5, 1999 at 11:00 a.m., local time. At the meeting you will be
asked to:
. elect three Directors, comprising the members of the class of
directors whose terms expire at this meeting, for a three-year term
expiring in 2002 (Item No. 1 on the Proxy Card);
. ratify the selection of PricewaterhouseCoopers LLP, Tulsa, Oklahoma,
as independent certified public accountants for the Company for its
fiscal year 1999 (Item No. 2 on the Proxy Card); and
. to transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on March 17, 1999, the
record date, are entitled to notice of and to vote at the meeting or any
adjournment(s) of the meeting. A complete list of such stockholders will be
open for examination by any stockholder 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.
(iii)
<PAGE>
The Company's Proxy Statement and Annual Report are submitted with this notice.
By Order of the Board of Directors,
/s/ Mark E. Schell
Mark E. Schell
Secretary and
General Counsel
Tulsa, Oklahoma
March 24, 1999
PLEASE VOTE - 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.
(iv)
<PAGE>
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1999
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Annual Meeting: May 5, 1999 Maple Room, Second Floor
11:00 a.m. Tulsa Marriott Southern Hills Hotel
1902 E. 71st Street
Tulsa, Oklahoma
Record Date: Close of business on March 17, 1999. On the record date
we had 26,653,341 shares outstanding. If you were a
stockholder at that time, you may vote at the meeting.
First Mailing Date: This proxy statement is being mailed to you and the other
stockholders on or about March 24, 1999.
Agenda: . Elect 3 directors (Item No. 1 on the Proxy card).
. Ratify the selection of PricewaterhouseCoopers LLP as
our independent certified public accountant for 1999
(Item No. 2 on the Proxy card).
. Any other business which may properly come before the
meeting.
Broker Non-Votes: Under the current rules of the New York Stock Exchange, if
your broker holds your shares in its "street" name, the
broker may vote your shares on both proposals even if it
does not receive instructions from you.
However, if your broker does not vote on either of the two
proposals, here is the effect of a broker non-vote:
1
<PAGE>
. Item One: Elect Three Directors. A broker non-vote
would have no effect on the outcome of this proposal
because only a plurality of votes cast is required
to elect a director.
. Item Two: Ratify Selection of Independent
Accountants. A broker non-vote would have no effect
on the outcome of this proposal.
Votes Per Share: Each share is entitled to one vote. You may not cumulate
votes.
Votes Required
For Each Proposal: Under the provisions of the Delaware General Corporation
law and the Company's By-laws, a majority of the
outstanding shares, present in person or represented by
proxy, will constitute a quorum for purposes of the
meeting. Abstentions and broker non-votes will be counted
for purposes of determining a quorum.
Item One - Elect Three Directors:
--------------------------------
The three nominees for director who receive the most
votes will be elected. So, if you do not vote for a
nominee, or you indicate "withhold authority to vote"
for any nominee on your proxy card, your vote will
not count either for or against the nominee.
Item Two - Ratify Selection of Independent Accountants:
------------------------------------------------------
The affirmative vote of a majority of the votes cast
at the meeting is required to ratify the selection of
independent auditors. So, if you "abstain" from
voting, it has the same effect as if you voted
"against" this proposal.
Proxy Solicitation: The expense of this proxy solicitation, including the
costs of preparing and mailing this statement and proxy
card, will be paid by the Company. Proxies are being
solicited by the directors, officers and other employees
of the Company at no additional compensation. In
addition, we have retained Regan & Associates, New
York, New York, to assist us at a cost of $3,500 plus
their expenses. We will reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for
reasonable expenses they incur in sending these proxy
materials to you.
Vote In Person: If you plan to attend the meeting and vote in person, we
will give you a ballot when you arrive.
If your shares are held in the name of your broker, bank
or other nominee, you must bring an account statement or
letter from the nominee. The account statement or letter
must show that you were the direct or indirect
(beneficial) owner of the shares on March 17, 1999.
2
<PAGE>
Voting Proxies: Unless you tell us on the proxy card to vote differently,
we will vote signed returned proxies FOR the board's
nominees (Item No. 1) and FOR the ratification of the
selection of independent accountants (Item No. 2). The
board or proxy holders will use their discretion on other
matters. If a nominee cannot or will not serve as a
director, the board or proxy holders will vote for a
person whom they believe is qualified to be elected.
You Can Revoke
Your Proxy: You may revoke your proxy at any time before it is voted
at the meeting by:
. Delivering a signed, written revocation letter,
dated after the proxy, to Mark E. Schell,
Secretary, at our Tulsa address noted above; or
. Delivering a signed proxy, dated later than the
prior one, to ChaseMellon Shareholder Services,
L.L.C., 600 Willow Tree Road, Leonia, NJ 07605;
or
. Attend the annual meeting and vote in person or
by proxy. Attendance alone will not revoke your
proxy.
DISCUSSION OF ITEMS
RECOMMENDED BY THE BOARD
Election of Directors - Item No. 1 on the Proxy Card
- - ----------------------------------------------------
The board is composed of eight members and is divided into three classes
with each director serving for a three-year term. At each annual meeting, the
term of one class expires. The term of service for those directors serving in
Class III expires at this meeting.
We know of no reason why any nominee may be unable to serve as a director.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the board, or the board may reduce the number of directors to be
elected. If any director resigns, dies or is otherwise unable to serve out his
or her term, or the board increases the number of directors, the board may fill
the vacancy until the next annual meeting.
BOARD NOMINEES:
--------------
The Board of Directors urges you to vote "For" these nominees.
Terms expiring . King P. Kirchner Mr. Kirchner, a co-founder of the
at this annual Age 71 Company, has been the Chairman of the
meeting Director since 1963 Board and a director since 1963 and was
(Class III) President until November 1983.
3
<PAGE>
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.
. Don Cook Mr. Cook has served as a director of
Age 74 the Company since the Company's
Director since 1963 inception. He is a Certified Public
Accountant and was a partner in the
accounting firm of Finley & Cook,
Shawnee, Oklahoma, from 1950 until
1987, when he retired.
. J. Michael Adcock Mr. Adcock was elected a director of
Age 50 the Company in December 1997. He is an
Director since 1997 attorney and currently manages a
private trust which deals in real
estate, oil and gas properties and
commercial banking as well as other
equity investments. He is Chairman of
the Board of Arvest American National
Bank & Trust Co. of Shawnee and a
member of the Board of Directors of
Medicine Lodge Bankshares. Between
1997 through September, 1998 he was the
Chairman of the Board of Ameribank and
President and Chief Executive Officer
of American National Bank and Trust
Company of Shawnee, Oklahoma, and
Chairman of AmeriTrust Corporation,
Tulsa, Oklahoma. Prior to holding
these positions, he was engaged in the
private practice of law from January 1,
1994 through March 1, 1996 and from
March 1, 1996 until November 1, 1997 he
served as General Counsel for Ameribank
Corporation. Mr. Adcock was also a
director of Grant Geophysical, Inc.,
from June 1994 until September 1997
when he resigned. Grant Geophysical,
Inc., filed a petition under Chapter 11
of the Federal Bankruptcy Code in
October, 1996.
CONTINUING DIRECTORS:
---------------------
Terms expiring . John G. Nikkel Mr. Nikkel joined the Company in 1983
at 2000 annual Age 64 as its President and a director. From
meeting Director since 1983 1976 until January 1982 when he co-
(Class I) 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
4
<PAGE>
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.
. John S. Zink Mr. Zink was elected a director of the
Age 70 Company in May 1982. For over 5 years,
Director since 1982 he has been 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 Oklahoma State
University. He is also a director of
Matrix Service Company, Tulsa,
Oklahoma.
Terms expiring . Earle Lamborn Mr. Lamborn has been actively involved
at 2001 annual Age 64 in the oil field for over 45 years,
meeting Director since 1979 joining the Company's predecessor in
(Class II) 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, Drilling and director in
1979.
. William B. Morgan Mr. Morgan was elected a director of
Age 55 the Company in February 1988. Mr.
Director since 1988 Morgan has been Executive Vice
President and General Counsel of St.
John Health System, Inc., Tulsa,
Oklahoma, since March 1, 1995 and,
since October 1, 1996, the President of
its principal for profit subsidiary
Utica Services, Inc. Before that, he
was a Partner in the law firm of
Doerner, Saunders, Daniel & Anderson,
Tulsa, Oklahoma, for over 20 years.
. John H. Williams Mr. Williams was elected a director of
Age 80 the Company in December 1988. Prior to
Director since 1988 retiring on December 31, 1978, he was
Chairman of the Board and Chief
Executive Officer of The Williams
Companies, Inc. where he continues to
serve as an honorary director. Mr.
Williams also serves as a director of
5
<PAGE>
Apco Argentina, Inc., Westwood
Corporation, and Willbros Group, Inc.
Ratification of Selection of Independent
Accountants - Item No. 2 on the Proxy Card
- - ------------------------------------------
The board has unanimously selected PricewaterhouseCoopers LLP as the
independent certified public accountants for the Company for its 1999 fiscal
year. The board is asking the stockholders to ratify and approve this action.
A representative of PricewaterhouseCoopers LLP, 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 believes that
stockholders should be given the opportunity to express their views on this
matter. However, even if you ratify the selection, the board may still appoint
new independent accountants at any time if it believes that such change would be
in the best interest of the Company and our stockholders. Failure to ratify
such selection is not binding on the board.
The Board of Directors urges you to vote "For" approval, which vote will
act to ratify the selection of PricewaterhouseCoopers LLP.
INFORMATION ABOUT COMPANY COMMON STOCK OWNERSHIP
Stockholders Who Own at Least 5% of the Company
- - -----------------------------------------------
The following table shows, as of December 31, 1998, the only persons we
know to own directly or indirectly ("beneficial owners") more than 5% of our
common stock. This information is based on a Schedule 13G, dated February 11,
1999, filed by this person with the Securities and Exchange Commission ("SEC").
For further information regarding this report, you may obtain a copy from the
SEC.
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
------------------- ------------------ -----------
Forstmann-Leff Associates Inc., 1,947,300 7.6
FLA Asset Management Inc.,
FLA Advisers L.L.C. and
Stamford Advisers Corp.
590 Madison Avenue
New York, NY 10022
Neuberger&Berman, LLC 1,499,100 5.87
605 Third Avenue
New York, NY 10158-3698
6
<PAGE>
Stock Owned by Directors and Executive Officers
- - -----------------------------------------------
The following table shows, as of March 17, 1999, the shares of the
Company's common stock owned 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 1998 and the
directors and executive officers of the Company as a group.
Name of Aggregate Number of Percent of
Beneficial Owner Beneficially Outstanding
Owned Shares Common Stock (1)
----------------- --------------------------- ----------------
King P. Kirchner 1,155,899 (2)(3) 4.33
Don Cook 23,138 (4) *
Earle Lamborn 320,342 (2)(3)(6) 1.19
William B. Morgan 20,000 (4) *
John G. Nikkel 443,822 (2)(3)(6)(7) 1.65
John H. Williams 18,500 (4) *
John S. Zink 58,500 (4) *
J. Michael Adcock 1,196,373 (4)(5) 4.48
Philip M. Keeley 220,328 (2)(6)(7) *
Larry D. Pinkston 143,116 (2)(3)(6) *
All Directors and Officers
as a Group (11 individuals) 3,669,744 (2)-(7) 13.57
* 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 17, 1999. 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 17, 1999, pursuant to the exercise of
outstanding stock options.
7
<PAGE>
(2) Includes shares of Common Stock held under the Company's 401(k) thrift plan
as of March 12, 1999 for the account of: King P. Kirchner, 7,979; Earle
Lamborn, 9,753; John G. Nikkel, 28,257; Philip M. Keeley, 29,012; Larry D.
Pinkston, 16,576; and directors and officers as a group, 101,275.
(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, 28,828; John G. Nikkel 76,000;
Earle Lamborn, 199,460; 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, 17,500; William B.
Morgan, 10,000; John H. Williams, 17,500; John S. Zink, 17,500 and J.
Michael Adcock, 2,500; all non-Employee Directors, including the estate of
Mr. Don Bodard, a former director, as a group, 72,500.
(5) Of the shares listed as being beneficially owned, 1,178,148 shares are
owned by a trust of which Mr. Adcock is one of three trustees.
(6) 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, 64,500; John G. Nikkel 122,460;
Philip M. Keeley, 55,500; Larry D. Pinkston, 36,500; and directors and
officers as a group, 315,460.
(7) Includes 7,149 shares and 2,862 shares beneficially owned by Mr. Nikkel
and Mr. Keeley, respectively, held by a private company over which Mr.
Nikkel and Mr. Keeley share voting and investment power.
INFORMATION ABOUT THE BOARD OF DIRECTORS
Board Meetings: The board held seven meetings during 1998. No director
attended fewer than 75% of the board meetings and the
meetings of committees on which he served during the year.
Committees of The board has standing Audit and Compensation committees.
the Board: The membership of each of these committees is determined
from time to time by the board. Only directors who are
not officers of the Company serve on the committees.
. The Audit Committee. This committee met two
times during 1998. Members: John S. Zink,
William B. Morgan and Don Cook. This
committee appoints the independent auditors
subject to ratification by the board, meets with
the independent auditors to review the scope and
results of the audit of the Company's financial
statements and consults with the Company's
personnel to determine the adequacy of internal
accounting controls.
8
<PAGE>
. The Compensation Committee. This committee met
one time during 1998. Members: John S. Zink,
John H. Williams, Don Cook and J. Michael
Adcock. This committee determines the salaries
payable to the Company's officers and authorizes
grants of stock options.
Director Annual Fee. We pay non-employee directors fees of $15,000
Compensation: each per year payable in four installments. Committee
members are paid fees of $2,000 for each committee they
serve on. We do not compensate our employees for service
as a director.
Meeting Fees. We pay non-employee directors a fee of:
. $750 for each board meeting attended;
. $500 for each committee meeting attended.
Expenses: We reimburse all non-employee directors for travel
expenses incurred attending stockholder, board and
committee meetings.
Annual Stock Each non-employee director automatically receives an
Option Award: option to purchase 2,500 shares of the Company's common
stock on the first business day following each annual
meeting of stockholders. The option price is the fair
market value of the Company's common stock on such date.
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.
In 1998 stock options were granted for an aggregate of
12,500 shares at $9.00 per share. An aggregate of 72,500
shares are subject to currently outstanding options.
INFORMATION REGARDING EXECUTIVE COMPENSATION
Summary Compensation Table
- - --------------------------
The following table provides information about the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company for services in all capacities to the Company
and its subsidiaries in 1996, 1997 and 1998.
9
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation<F1> Awards Payouts
----------------------------- ---------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name Annual Restricted Securities
and Compen- Stock Underlying LTIP All Other
Principal Salary Bonus sation Award(s) options Payout Compensation
Position(s) Year ($) ($) ($)<F2> ($) (#) ($) ($)<F3>
- - --------------- ---- ------- -------- ------- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
King P. Kirchner 1998 250,000 0 0 0 0 0 6,000
Chairman and CEO 1997 220,000 0 0 0 0 0 9,286
1996 200,000 0 0 0 0 0 7,500
John G. Nikkel 1998 250,000 71,666 7,225 0 40,000 0 5,833
President and COO 1997 230,000 35,000 7,210 0 0 0 9,456
1996 210,000 168,333<F4> 7,669 0 30,000 0 7,500
Earle Lamborn 1998 170,000 58,333 1,766 0 15,000 0 9,154
Sr. Vice President - 1997 130,000 43,333 3,767 0 0 0 8,602
Drilling 1996 115,000 33,333 1,440 0 10,000 0 7,359
Philip M. Keeley 1998 170,000 50,000 7,434 0 15,000 0 8,025
Sr. Vice President - 1997 165,000 25,000 7,434 0 0 0 6,200
Exploration & 1996 155,000 110,000<F4> 1,440 0 10,000 0 5,812
Produciton
Larry D. Pinkston 1998 122,500 33,333 0 0 12,000 0 7,182
V. P., CFO 1997 117,500 27,000 0 0 0 0 6,859
and Treasurer 1996 110,000 19,667 0 0 7,500 0 5,323
<FN>
<F1> Compensation deferred at the election of an executive is included in the
year earned.
<F2> 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.
<F3> "All Other Compensation" represents the Company's matching contributions
to the Company 401(k) thrift plan for the named executive officer.
<F4> The amounts indicated reflect the acceleration of the payment of bonuses
awarded to Mr. Nikkel and Mr. Keeley in 1995 and 1996. These awards are
generally paid out in three annual installments. The amounts shown
reflect the payment of the third installment of the 1995 bonus,
otherwise due January 1997, and the second and third installments of the
1996 bonus awards, otherwise due January 1997 and January 1988,
respectively. These bonus awards were accelerated at the discretion of
the Compensation Committee and used by the named executive officer to
pay the exercise price of certain stock options exercised in fiscal
1996.
</FN>
</TABLE>
10
<PAGE>
Option Grants in 1998
- - ---------------------
The following table provides information concerning certain stock option(s)
granted to each of the named executive officers during 1998.
Potential
Realizable
Value at Assumed
Annual Rates
of Stock Price
Appreciation for
Individual Grants (1) Option Terms (3)
-------------------------------------------- ----------------
Percent of
Number of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration
Name Granted (#) In 1998(2) ($/Sh) Date 5% ($) 10% ($)
- - ---------------- ----------- ------------ -------- ---------- ------ -------
King P. Kirchner -0- N/A N/A N/A N/A N/A
John G. Nikkel 40,000 17.70 $3.75 12/22/08 94,334 239,061
Earle Lamborn 15,000 6.64 $3.75 12/22/08 35,375 89,648
Philip M. Keeley 15,000 6.64 $3.75 12/22/08 35,375 89,648
Larry D. Pinkston 12,000 5.31 $3.75 12/22/08 28,300 71,718
(1) All options were granted on December 22, 1998 at an exercise price equal to
the closing market price of the Company's common stock on that date. The
options vest in 20% annual increments commencing 12 months after their date
of grant. All options vest immediately in the event of a "change in
control," as defined in the plan.
(2) Based on a total of 226,000 options being granted to certain employees
during fiscal 1998.
(3) Caution is recommended in interpreting the financial significance of these
figures. They are calculated by multiplying the number of options granted
by the difference between a future hypothetical stock price and the option
exercise price and are shown pursuant to rules of the Securities and
Exchange Commission. They assume the value of the Company Common Stock
appreciates 5% and 10% each year, compounded annually, for ten years (the
life of each option). They are not intended to forecast possible future
appreciation, if any, of such stock price or to establish a present value
of options. Also, if appreciation does occur at the 5% or 10% per year
rate, the amounts shown would not be realized by the recipients until the
year 2008. Depending on inflation rates, these amounts may be worth
significantly less in 2008, in real terms, than their value today.
11
<PAGE>
Aggregate Option Exercises in 1998
and Option Values at December 31, 1998
- - --------------------------------------
The following table provides information regarding the stock options
exercised by the named executive officers in 1998 as well as the value of the
stock options held by such executives at year end measured in terms of the fair
market value of the Company's common stock on December 31, 1998. The Company
has never granted any stock appreciation rights.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Shares Underlying Unexercised
Acquired Value Unexercised In-the-Money
on Exercise Realized Options at Options at
Name (#) ($)<F1> FY-End (#) FY-End ($)<F2>
- - ---------------- ----------- -------- -------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
King P. Kirchner N/A N/A N/A N/A N/A N/A
John G. Nikkel 10,000 34,375 122,460 62,500 152,575 14,500
Earle Lamborn N/A N/A 64,500 23,000 81,225 5,750
Philip M. Keeley 1,000 2,567 55,000 23,000 66,555 5,750
Larry D. Pinkston N/A N/A 36,500 18,000 44,175 4,500
<FN>
<F1> Value realized equals fair market value of the stock on date of
exercise, less the exercise price, times the number of shares acquired.
<F2> The value of unexercised in-the-money options at year end assumes a
fair market value for the Company's Common Stock of $4.00, the average of the high and low prices of
the Company's Common Stock on the New York Stock Exchange on
December 31, 1998. Value is calculated on the basis of the difference
between the option exercise price and $4.00 multiplied by the number of shares of Common Stock
underlying the options.
</FN>
</TABLE>
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.
Change-In-Control Stock Option Plan. The Company's stock option plan
Arrangements: contains a provision vesting all stock options in the
event of a "change-in-control" of the Company. A
"change-in-control" is deemed to have occurred at such
12
<PAGE>
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.
Separation Benefit Plan. On December 20, 1996, effective
as of January 1, 1997, the board adopted the Separation
Benefit Plan of Unit Corporation and Participating
Subsidiaries (the "Plan"). The Plan is generally
applicable to all full time salaried employees of the
Company and its two principal subsidiaries, excluding
any employees who are also directors of the Company,
who have been with their employer for at least one year.
Subject to all of the terms of the Plan, any eligible
employee whose employment is terminated by his or her
employer is entitled to receive a separation benefit in
an amount calculated by dividing such eligible employee's
annual base salary in effect immediately prior to such
employee's separation by 52 to determine a weekly
separation benefit amount. The number of weekly
separation benefit payments then payable to such employee
is calculated based on the employee's years of service in
accordance with a schedule set forth in the Plan.
Employees who voluntarily leave their employment are not
entitled to receive a separation benefit unless they have
completed at least 20 years of service. Any eligible
employee who has completed 20 years of service or more is
vested in his or her separation benefit, subject to
fulfilling the other requirements of the Plan.
Separation benefit payments are limited to a maximum of
104 weekly payments. The Plan also provides that, unless
otherwise provided by the Company's Board of Directors
prior to a "change-in-control" of the Company, as defined
in the Plan, all eligible employees shall be vested in
their separation benefit as of the date of such "change-
in-control" based on their years of service. As a
precondition to receiving the separation benefits,
employees must sign a separation agreement waiving any
claims the employee may have against the Company or its
subsidiaries.
Senior Management Separation Benefit Plan. On October 28,
1997, the board adopted the Separation Benefit Plan for
Senior Management. This plan is similar in terms of the
benefits and requirements described above for the
Separation Benefit Plan, with the exception that the
Compensation Committee determines who will participate in
13
<PAGE>
this plan. In addition, the committee is given the
authority to increase (up to a maximum of 104) the number
of weekly separation benefit payments a participant would
otherwise be entitled to receive under the plan if the
participant is involuntarily terminated. Currently only
Messrs. Kirchner, Lamborn and Nikkel are participants in
this plan.
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), except to the
extent that the Company specifically incorporates this information by reference.
The Compensation Committee is responsible for setting and overseeing the
compensation of the Company's executive officers. The committee is composed
entirely of independent outside directors. 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, J. Michael Adcock and John H. Williams.
Objectives and Considerations - The objectives of the committee in
determining executive compensation are to 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. In
making its decisions, the committee takes into account the conditions within the
Company's industry, the Company's income and cash flow and the attainment of any
designated business objectives. Individual performances are also reviewed,
taking into account the individual's responsibilities, experience and potential,
his or her period of service and current salary and the individual's
compensation level as compared to similar positions at other companies. The
committee's evaluation of these considerations is, for the most part, 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 its executive officers. In determining the base salaries for the
executive officers for 1998 the committee relied primarily on its evaluation of
the compensation being paid to individuals holding comparable positions in the
industry. In doing so, the committee relied, to a large extent, on the results
of the Peat Marwick Oil and Gas Corporation Survey 1997 Report which surveyed
the compensation and benefit programs of 134 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 range, the Committee then made any adjustments 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 1998 salaries of each of the named executive
officers by the following percentage: John G. Nikkel 8.7%; Earle Lamborn 30.7%;
Philip M. Keeley 3.0% and Larry Pinkston 4.3%.
14
<PAGE>
Bonuses - Executive officers are eligible to earn annual bonuses either in
cash or in stock. Stock bonuses are awarded pursuant to the Company's bonus
plan approved by the Company's stockholders 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 stockholders on May 2, 1984 and amended on May
3, 1989 and May 3, 1995, provide an incentive for executive officers to maximize
long-term stockholder 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 is 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.
No stock options were granted to the Company's executive officers as part of
their 1998 compensation. However, as reflected in the Option Grants in 1998
table, options were granted to certain of the Company's executive officers on
December 22, 1998. Those options were granted in connection with the
committee's actions on December 22, 1998 when it determined the executive
officers' 1999 compensation.
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 raised Mr. Kirchner's 1998 salary by 13.6%.
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 1998, 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
J. Michael Adcock
Compensation During 1998, the Compensation Committee members were
Committee responsible for determining executive compensation,
Interlocks and including decisions relating to stock option grants to
Insider executive officers. None of the executive officers of the
Participation: Company is a member of that committee.
15
<PAGE>
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),
except to the extent that the Company specifically incorporates this information
by reference.
The following graph reflects a comparison of the cumulative total return
(change in stock price plus reinvested dividends, assuming $100 invested on
December 31, 1993) of the Company's common stock from December 31, 1993 through
December 31, 1998 with the Standard & Poor's 500 Composite Index and the S&P Oil
- - - Integrated Domestic Index. 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.
(GRAPH)
Dollar Value of $100 Investment at December 31,
----------------------------------------------------------
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- --------
The Company $ 100.00 $ 109.09 $ 172.73 $ 359.09 $ 350.00 $ 152.29
S&P 500 $ 100.00 $ 101.32 $ 139.40 $ 171.40 $ 228.59 $ 293.91
S&P Oil-Integ. $ 100.00 $ 104.92 $ 119.46 $ 151.07 $ 179.75 $ 145.93
16
<PAGE>
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 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. Since January 1, 1998, Mr. John G.
Nikkel, a director and the President of the Company, invested $72,000 in the
Unit 1998 Employee Oil and Gas Limited Partnership and $40,000 in the Unit 1999
Employee Oil and Gas Limited Partnership. In addition, Nike Exploration
Company, which is owned 71.4% by Mr. Nikkel, invested $100,000 in the 1998
program and $76,000 in the 1999 program.
With respect to their review and approval of any material transactions
between the Company and any related party, including, if applicable, those
discussed above, the board considers the terms which are or would be available
to the Company in similar transactions with non-affiliated parties dealing at
arm's-length.
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 our review of the forms received by us with respect to
fiscal 1998, or written representations from certain reporting persons, the
Company believes that it has complied with all filing requirements applicable to
its directors, officers and persons who own more than 10% of the Company's
common stock.
Matters Which May Come Before the Meeting
- - -----------------------------------------
The board 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. However, should other matters not mentioned in this proxy
statement properly come before the meeting, the persons named in the
accompanying proxy card will vote on them in accordance with their best
judgment.
17
<PAGE>
Submission of Stockholder 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 2000 Annual Meeting of Stockholders, a stockholder proposal submitted
pursuant to Rule 14a-8 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, no later than November 25, 1999.
Any stockholder who intends to present a proposal at the 2000 Annual
Meeting of Stockholders and has not sought inclusion of the proposal in the
Company's proxy statement pursuant to Rule 14a-8, must provide the Company with
notice of such proposal no later than February 8, 2000.
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, 1998 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.
18
<PAGE>
UNIT CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1999
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
R power of substitution, to vote all shares of Unit Corporation Common
Stock which the undersigned may be entitled to vote at the Annual
O Meeting of Stockholders of Unit Corporation, Tulsa, Oklahoma, on
Wednesday, May 5, 1999 at 11:00 A.M., or at any adjournment thereof,
X upon the matters set forth on the reverse side and described in the
accompanying Proxy Statement and upon such other business as may
Y properly come before the 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
J. Michael Adcock
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.
