<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-K/A
AMENDMENT NO. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
COMMISSION FILE NUMBER 1-8241
PRESIDIO OIL COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 95-3049484
(State of Incorporation) (I.R.S. Employer Identification No.)
5613 DTC PARKWAY, SUITE 750
ENGLEWOOD, COLORADO 80111-3065
(Address of principal executive offices) (Zip Code)
(303) 773-0100
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
<S> <C>
CLASS A COMMON STOCK, $.10 PAR VALUE PER SHARE AMERICAN STOCK EXCHANGE
CLASS B COMMON STOCK, $.10 PAR VALUE PER SHARE AMERICAN STOCK EXCHANGE
9% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2015 AMERICAN STOCK EXCHANGE
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 15, 1995 was $4,102,000.
The number of shares outstanding of each of the registrant's classes of common
stock as of March 15, 1995 was as follows:
<TABLE>
<CAPTION>
Class Number Outstanding
----- ------------------
<S> <C>
CLASS A COMMON STOCK, $.10 PAR VALUE PER SHARE 25,318,085
CLASS B COMMON STOCK, $.10 PAR VALUE PER SHARE 3,216,585
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
THE BOARD OF DIRECTORS
Pursuant to the Bylaws of the Company, the Board of Directors shall
consist of the number of directors designated by resolution of the Board of
Directors. Currently, the number of directors is fixed at nine (9). The Board
of Directors is currently comprised of the following:
<TABLE>
<CAPTION>
DIRECTOR TERM TO
NAME AGE SINCE EXPIRE
- ------------------------- --- -------- -------
<S> <C> <C> <C>
William D. Benjes, Jr. 56 1987 1995
Hugh A. L. Mumford 49 1986 1995
Peter Silvester 59 1987 1995
John W. Hyland, Jr. 57 1993 1996
Raymond J. Kosi 59 1984 1996
J. Howard Marshall, II 90 1987 1996
George P. Giard, Jr. 56 1986 1997
Peter H. Havens 40 1983 1997
Robert L. Smith 52 1992 1997
</TABLE>
William D. Benjes, Jr. is the founder of Stratfield Investment
Management, Inc. and has been its President since 1986. Mr. Benjes was with
Fort Hill Investors Management Group from 1977 through 1985 and served as its
President from 1982 through 1985.
Hugh A. L. Mumford currently serves as managing director of Electra
Investment Trust P.L.C. ("Electra"). Mr. Mumford has been an officer of
Electra since 1981 and a director since 1985. Mr. Mumford, a citizen of the
United Kingdom, is also a director of Mezzanine Capital Corporation, an
investment company, and New London Oil P.L.C.
Peter Silvester is Executive Director and General Manager
(Investments) of Friends' Provident Life Office ("Friends") and Executive
Director of a number of its subsidiaries. Mr. Silvester, a citizen of the
United Kingdom, has been an executive with Friends for more than the last six
years. He is a Fellow of the Institute of Actuaries and a Fellow of the
Pensions Management Institute, where he was on the Council for six years and
Vice President from 1983 to 1985. Mr. Silvester is also a director of Esprit
Gestion S.A. and Mapral Limited.
John W. Hyland, Jr. has been a partner of McFarland Dewey & Co. since
1992 and previously served as a managing director of Rho Management Company,
Inc. from 1989 to 1992. He was a managing director of PaineWebber Incorporated
and Vice Chairman of PaineWebber/Young and Rubicam Ventures from 1983 to 1988,
Vice Chairman of Warburg Paribas Becker Inc. from 1980 to 1983, and prior
thereto a partner in Morgan Stanley & Co. Inc. Mr. Hyland is also a director
of Summit Communications Group, Inc.
Raymond J. Kosi is a private investor and business consultant. Mr.
Kosi was the co-founder and an officer from 1963 through 1993 of K.R.K. Inc., a
privately-owned manufacturer of plastic injection moldings.
J. Howard Marshall, II was Chairman of the Board of Petroleum
Development Corporation from its incorporation in 1984 until its acquisition by
the Company in 1987. Mr. Marshall is Chairman of Marshall Petroleum, Inc., and
has been an independent oil and gas operator for the last twenty years.
Previously, Mr. Marshall has served as Special Counsel, Chevron Corporation;
Partner, Pillsbury, Madison
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<PAGE> 3
and Sutro; President, Ashland Oil Company; Executive Vice President, Signal Oil
Company; President, Union Texas Petroleum Corporation; and Executive Vice
President, Allied Chemical Company. He currently serves as a Director of Koch
Industries, Inc. and Coastal Oil & Gas Corporation.
George P. Giard, Jr. is Chairman of the Board and Chief Executive
Officer of the Company. Mr. Giard joined the Company in 1986 after being a
partner since 1981 in Oil & Gas Finance Limited, a private energy investment
firm. He also served as a director of Marline Oil Corporation from 1976
through 1985 and Chairman of the Board of that company from 1976 through 1983.
He has also served as a director of Crystal Oil Company since 1987.
Peter H. Havens has been manager since 1982 of Kewanee Enterprises, an
investment firm. Mr. Havens has been a director of Bryn Mawr Trust Company
since March 1986 and is also a director of Nobel Education Dynamics, Inc.
Robert L. Smith has been a director of the Company since 1992 when he
was elected President and Chief Operating Officer of the Company. Mr. Smith
was previously Executive Vice President of the Company since 1987, and prior to
joining the Company and for over five years, he served in various capacities,
including President and Chief Operating Officer, with Cenergy Corporation, an
oil and gas exploration and production company.
OTHER EXECUTIVE OFFICERS
The following is a list of executive officers and managers of the
Company, other than Mr. Giard and Mr. Smith, each of whose term of office runs
until a successor is duly appointed:
Christopher S. Hardesty, age 50, joined the Company in 1992 as Vice
President-Finance, Treasurer and Chief Financial Officer. Mr. Hardesty was
previously Executive Vice President, Treasurer and Chief Financial Officer of
DeKalb Energy Company and for over five years, served in various capacities
with Newmont Mining Corporation, Newmont Gold Company and Exxon Corporation.
Kendell V. Tholstrom, age 49, currently serves as Vice President and
General Manager, Rocky Mountain and Mid-Continent Regions of the Company. Mr.
Tholstrom joined the Company in 1986 as Operations Manager and subsequently
served as Vice President of Operations and Vice President and General Manager,
Rocky Mountain Division. He has eighteen years of prior reservoir engineering
and operations experience with Sabine Corporation and Terra Resources, Inc.
Bruce R. DeBoer, age 42, joined the Company as General Counsel and
Corporate Secretary in 1988. He was previously Corporate Attorney and
Assistant Secretary for Canterra Petroleum, Inc. and General Counsel and
Secretary of Energetics, Inc. Prior thereto, Mr. DeBoer was engaged in the
private practice of law in Denver, Colorado.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the American Stock Exchange. Officers, directors and
greater than ten percent (10%) shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the period from January 1, 1994 to December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent (10%) beneficial owners were complied with.
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<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth compensation paid by the Company to its
Chief Executive Officer and four other most highly compensated executive
officers for fiscal years 1994, 1993 and 1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION (1) COMPENSATION
---------------------------------------- ------------
OTHER
ANNUAL OPTIONS ALL OTHER
NAME AND SALARY ($) COMPENSATION AWARDED COMPENSATION
PRINCIPAL POSITION YEAR (2) BONUS($) ($) (3) (#) (4) ($) (5)
------------------ ---- ---------- -------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C> <C>
George P. Giard, Jr. 1994 380,769 -0- 11,250 114,000 274,405(6)
Chairman and CEO 1993 332,596 100,000 -0- 235,000 165,138(6)
1992 396,635 30,300 -0- 139,039 30,000
Robert L Smith 1994 257,492 -0- 11,250 57,000 152,950(7)
President and COO 1993 228,307 50,000 -0- 125,000 90,155(7)
1992 203,625 19,000 -0- 51,622 30,000
Christopher S. Hardesty 1994 168,000 -0- 11,250 28,000 11,250
Vice President and 1993 150,000 38,000 -0- 55,000 -0-
CFO 1992 6,827(8) -0- -0- 25,000 -0-
Kendell V. Tholstrom 1994 150,600 22,500 11,250 25,000 11,250
Vice President 1993 128,125 45,000 -0- 50,000 27,469
1992 126,322 10,000 -0- 22,524 19,808
Bruce R. DeBoer 1994 119,091 -0- 8,625 17,000 8,625
General Counsel and 1993 102,083 31,500 -0- 40,000 21,058
Secretary 1992 111,923 6,800 -0- 10,958 17,519
</TABLE>
__________________
(1) The Company provides group insurance benefits for its executive
officers which are generally available to all salaried employees,
including medical and dental insurance, term life insurance, and
long-term disability insurance. In addition, executive officers of
the Company are provided certain club memberships for business
purposes. A certain amount of personal use of these benefits may be
made by the recipients. After reasonable inquiry, the Company has
concluded that the aggregate amount of such personal benefits, which
cannot be specifically or precisely ascertained, was less than either
$50,000 or ten percent (10%) of the salary and bonus reported for each
of the named executive officers.
(2) For 1994, the salaries of Messrs. Giard, Smith, Hardesty, Tholstrom
and DeBoer were comprised, in part, of cash payments for accrued but
unused vacation time in the amount of $20,769, $21,230, $8,000, $7,600
and $4,091, respectively. For 1993, the salaries of Messrs. Giard and
Smith were comprised, in part, of cash payments for accrued but unused
vacation time in the amount of $13,846 and $8,307, respectively. For
1992, the salaries of Messrs. Giard, Smith, Tholstrom and DeBoer were
comprised, in part, of cash payments for accrued but unused vacation
time in the amounts of $21,635, $8,625, $1,322 and $11,923,
respectively.
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<PAGE> 5
(3) In 1994, the Company contributed an amount equal to 7.5% (to a maximum
of $11,250) of 1994 cash compensation to each employee's account in
respect of the Company's 401(k) Plan which was established January 1,
1994. Participation of an employee in the 401(k) Plan commences upon
employment.
(4) The options listed for 1993 and 1994 are shares of Class A Common
Stock and for 1992 are shares of Class B Common Stock other than Mr.
Hardesty's shares which are Class A Common Stock. See "Stock Option
Grants" and "Compensation Committee Report on Executive Compensation".
(5) Includes Company contributions to the Company's Employee Stock
Ownership Plan (the "ESOP") in an amount equal to (i) in 1994, 7.5%
(to a maximum of $11,250) and (ii) in 1993 and 1992, 15% (to a maximum
of $30,000) of cash compensation paid in each calendar year.
Participation of an employee in the ESOP was subject to a one-year
waiting period until August 1, 1994, at which time the ESOP was
amended to allow participation upon employment.
(6) Includes estimated accruals of $263,155 and $135,138 in the Company's
financial statements in 1994 and 1993, respectively, for the benefit
of Mr. Giard in respect of his supplemental executive retirement plan
("SERP"). See "Long-Term Incentive Plans and Pension Plans".
(7) Includes estimated accruals of $141,700 and $60,155 in the Company's
financial statements in 1994 and 1993, respectively, for the benefit
of Mr. Smith in respect of his SERP. See "Long-Term Incentive Plans
and Pension Plans".
(8) Mr. Hardesty joined the Company on December 15, 1992 at an annual
salary of $150,000.
STOCK OPTION GRANTS
<TABLE>
<CAPTION>
1994 OPTION GRANTS
GRANT DATE
INDIVIDUAL GRANTS VALUE
- -------------------------------------------------------------------------------------------- ----------
% OF TOTAL
NO. OF SHARES OPTIONS POTENTIAL
UNDERLYING GRANTED TO EXERCISE REALIZABLE
OPTIONS EMPLOYEES PRICE EXPIRATION VALUE ($)
NAME GRANTED (1) IN 1993 ($/SHARE) DATE (2)
- -------------------------- -------------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
George P. Giard, Jr. 114,000 24.6 .75 2004 14,250
Robert L. Smith 57,000 12.3 .75 2004 7,125
Christopher S. Hardesty 28,000 6.0 .75 2004 3,500
Kendell V. Tholstrom 25,000 5.4 .75 2004 3,125
Bruce R. DeBoer 17,000 3.7 .75 2004 2,125
</TABLE>
__________________
(1) The options listed cover shares of Class A Common Stock which become
exercisable in equal increments during the first four years of
continuous employment after the grant date of December 13, 1994,
except that if the price of the Company's Class A Common Stock equals
or exceeds $4.00 per share for ten (10) consecutive trading days,
fifty percent (50%) of the then unvested shares automatically vest,
and if such price equals or exceeds $6.00 per share for ten
consecutive trading days, the then unvested shares become one hundred
percent (100%) vested. The exercise price was equal to 171% of the
closing price of Class A Common Stock on the American Stock Exchange
on December 13, 1994.
(2) The grant date present value is determined by using the Black-Scholes
Model. The Black-Scholes Model is a complicated mathematical formula
widely used to value exchange traded options. However, stock options
granted by the Company to its executives differ from exchange traded
options in three key respects: options granted by the Company to its
executives are long-term, non-transferable
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<PAGE> 6
and subject to vesting restrictions while exchange traded options are
short-term and can be exercised or sold immediately in a liquid market.
In this presentation, the Black-Scholes Model has been adapted to
estimate the present value of the options set forth in the table, taking
into consideration a number of factors, including an expected volatility
of 157%, a risk-free rate of return of 7%, a dividend yield of 0% and
an exercise period of 10 years. No adjustments were made for
non-transferability or risk of forfeiture. Consequently, because the
Black-Scholes Model has been adapted to value the options set forth in
the table and is assumption-based, it may not accurately determine
present value. The actual value, if any, an optionee will realize will
depend on the excess of the market value of the shares over the exercise
price on the date the option is exercised.
OPTION EXERCISES AND HOLDINGS
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1994
AND 1994 YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT 12/31/94 (1) AT 12/31/94
---------------------------- ---------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George P. Giard, Jr. -0- N/A 69,750 290,250 -0- -0-
313,539 100,000 -0- -0-
Robert L. Smith -0- N/A 31,250 150,750 -0- -0-
105,622 52,000 -0- -0-
Christopher S. Hardesty -0- N/A 20,000 88,000 -0- -0-
-0- -0- -0- -0-
Kendell V. Tholstrom -0- N/A 13,000 62,500 -0- -0-
49,274 19,000 -0- -0-
Bruce R. DeBoer -0- N/A 10,000 47,000 -0- -0-
20,458 13,000 -0- -0-
- -----------------
</TABLE>
(1) All amounts listed in the first line for each individual are shares of
Class A Common Stock and all amounts listed in the second line for
each individual are shares of Class B Common Stock.
LONG-TERM INCENTIVE PLANS AND PENSION PLANS
The Company has no long-term incentive plan or defined benefit or
actuarial plan. However, Messrs. Giard and Smith have each entered into a
Supplemental Executive Retirement Agreement (the "SERP Agreement") with the
Company which provides each officer with cash benefits upon retirement in the
form of a ten year annuity with annual payments equal to a maximum of sixty
percent (60%) of each officer's average annual salary and bonus for the three
(3) years preceding retirement. The amount of annual benefit upon retirement
is equal to (i) the officer's final average earnings multiplied by a percentage
factor based upon years of service to the Company weighted separately for each
officer so that termination of employment at age sixty-five (65) provides a
maximum factor of sixty percent (60%) reduced by (ii) the value upon
retirement, of such officer's ESOP account and any other amounts payable to
such officer under any other qualified retirement plans adopted by the Company
subsequent to the SERP Agreement. Accordingly, the annual benefits payable
upon retirement at normal retirement age for Messrs. Giard and Smith are
difficult to estimate due to the offsetting value upon retirement of each
officer's ESOP account which is comprised solely of equity securities of the
Company. As of April 21, 1995, Mr. Giard is credited with 9 years of service
and Mr. Smith is credited with 7 years of service.
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<PAGE> 7
REPORT ON REPRICING OF OPTIONS
The Company has not adjusted or amended the exercise price of stock
options previously awarded to any of the named executive officers other than as
reported in previous proxy statements.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
No executive officer of the Company has an employment contract and
there is no compensatory plan or arrangement in respect of the resignation,
retirement or any other termination of any executive officer's employment with
the Company or a change-in-control or any change in executive responsibilities
following a change-in-control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are William D.
Benjes, Jr., John W. Hyland, Jr. and J. Howard Marshall, II. No member of the
Compensation Committee of the Board of Directors during the last fiscal year is
or formerly was an officer or employee of the Company or any of its
subsidiaries. No executive officer of the Company and no member of the
Compensation Committee has or had any relationships requiring disclosure under
regulations applicable to this report.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and determines all compensation
matters for the Company's executive officers. The executive compensation
program is comprised of salary, annual cash and 401(k) incentives as well as
long-term incentives principally in the form of employee stock options and
stock contributed to the ESOP. Each year the Compensation Committee determines
salary adjustments, if any, and the level of benefit grants under the Company's
Executive Bonus Program (the "EBP") and its Incentive Stock Option Plan (the
"ISOP") as well as the contribution levels in respect of its 401(k) Plan and
ESOP. Generally, the Compensation Committee meets toward the end of each
fiscal year (and/or shortly thereafter) to consider executive compensation
matters, largely based on the achievements of the Company in relation to
certain performance targets. In respect of such matters, the Compensation
Committee also considers independent compensation studies relating to
compensation practices in the independent oil and gas industry, including
William M. Mercer, Incorporated and KPMG Peat Marwick. Such studies are
comprised of independent oil and gas companies choosing to participate therein
which differ from the companies comprising the Standard & Poor's Oil (Domestic
Integrated) Index used in the performance graph included herein. The
Compensation Committee believes that the compensation paid by such independent
companies, with a predominantly exploration and production (non-integrated)
line of business, is a better basis for compensation comparison than the
integrated companies included in the performance graph.
The Compensation Committee's executive compensation practices are
designed to provide competitive levels of base salary, annual bonus awards
under the EBP and stock option grants under the ISOP for the Company's
executive officers, that, in order of relative importance, (i) reflect the
Company's achievements in respect of the specific performance targets outlined
below, (ii) recognize individual initiative and achievement as well as levels
of compensation in the independent oil and gas industry, and (iii) assist the
Company in attracting and retaining qualified executives. The Compensation
Committee utilizes compensation studies to assure that the various components
of the Company's total compensation approximate survey averages within the
independent oil and gas industry, subject to further adjustment upon the
subjective determination of the Compensation Committee in respect of the three
foregoing factors.
In addition to the three factors set forth above and the compensation
surveys which are generally utilized by the Compensation Committee in respect
of setting levels of total compensation for the executive officers as a group,
the Compensation Committee also considers various levels of responsibility,
prior experience, breadth of knowledge and internal equity issues in setting
base salary levels. Such salary levels for 1994 for the executive officers as
a group approximated compensation survey averages.
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<PAGE> 8
Mr. Giard's 1994 base salary of $360,000 was determined in December
1993 and represented an increase of 13% vis-a-vis his 1993 salary level,
reflecting the Company's favorable 1993 performance as well as competitive and
other factors existing at that time.
In establishing the amounts of the 1994 bonus awards under the EBP and
the stock option grants under the ISOP, the Compensation Committee in
particular reviewed the Company's achievements in respect of its performance
targets for 1994 which included: (i) oil and gas reserve replacement - the
Company's yearend 1994 proved hydrocarbon reserves, on an equivalent barrel
("BOE") basis, were to be equal to or greater than 107.5% of the Company's 1993
yearend proved hydrocarbon reserves; (ii) return on capital - the rate of
return on the capital of the Company, based on its 1994 EBITDA (earnings before
interest, taxes and depreciation, as adjusted for the impact of oil and gas
production rates and pricing scenarios), was to be 15% or greater; and (iii)
net asset value - the Company's adjusted net asset value as of yearend 1994
would be 10% greater than such net asset value as of yearend 1993. The
Company's achievements in 1994 relative to such targets (each of which the
Compensation Committee weighed equally) were slightly less than the percentage
goals set forth above.
The Compensation Committee also noted that the Company's production
costs declined substantially in 1994 to $3.71 per BOE, compared to $4.10 per
BOE in 1993.
In consideration of the Company's performance in 1994 in respect of
its targeted goals, as well as in realizing significant operating efficiencies
in such year, the Compensation Committee made a subjective determination that
the executive officers as a group should receive the stock option grants under
the ISOP discussed in detail under "Stock Option Grants", which consisted of
grant date option values that ranged from 2% to 4% of base salary. The
Compensation Committee also determined that no cash bonus awards should be made
under the EBP except to Mr. Tholstrom who received a bonus equal to 15.7% of
his base salary.
For 1994, Mr. Giard was awarded an option to purchase 114,000 shares
of Class A Common Stock which primarily reflected the Company's overall 1994
achievements relative to its performance targets, as described above.
In respect of the 401(k) Plan and the ESOP, which relate to all
Company employees, the Compensation Committee has in recent years authorized
annual contributions to the ESOP in the form of the Company's common stock for
each employee of the Company (including the executive officers as a group) in
an amount equal to 15% (up to a maximum of $30,000 per employee) of such
employee's eligible cash compensation. In 1994, the Company adopted a 401(k)
Plan in which all employees are allowed to participate. The Committee elected
to split the annual contribution for 1994 equally between the 401(k) Plan and
the ESOP in an amount equal in each case to 7.5% (up to a maximum of $11,250)
of each employee's cash compensation. The annual amount of these contributions
is determined by the Compensation Committee based upon general levels of
compensation in the independent oil and gas industry and without specific
reference to the above-mentioned executive compensation practices which relate
to the executive officers as a group.
The Omnibus Budget Reconciliation Act of 1993 contains provisions
which limit the tax deductibility of executive compensation in excess of $1
million per year, subject to certain exceptions. The current policy of the
Company is to design its compensation programs to preserve the tax
deductibility of compensation paid to its executive officers and other members
of management. However, the Compensation Committee could in the future
determine, taking into consideration the relevant factors then in existence, to
make awards or approve compensation that does not qualify for a compensation
deduction for tax purposes, if the Compensation Committee believes it is in the
Company's interest to do so.
The Compensation Committee intends to maintain its practice of
providing a competitive salary structure for its CEO and other executive
officers and basing salary levels, bonus and other compensation
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<PAGE> 9
on corporate and individual performance. In this respect the Compensation
Committee continues to establish annual performance goals to be achieved by the
CEO and the Company's other executive officers.
William D. Benjes, Jr., Co-Chairman
John W. Hyland, Jr., Co-Chairman
J. Howard Marshall, II
PERFORMANCE GRAPH
The following performance graph compares, for the 1989-1994 period,
the percentage changes in the Company's cumulative total shareholder return on
its Class A Common Stock to that of the American Stock Exchange Market Value
Index and the S&P Oil- Domestic Integrated Index. All cumulative returns
assume reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Presidio Oil Company 100.00 60.64 40.37 10.72 25.27 6.89
AMEX Market Value 100.00 81.51 104.51 105.62 126.23 114.73
S&P Oil - Domestic Integrated 100.00 92.53 78.87 80.26 81.18 82.24
</TABLE>
COMPENSATION OF DIRECTORS
Directors of the Company are each entitled to receive $2,500 for each
meeting of the Board of Directors and $2,000 for each meeting of a committee
(other than the Nominating Committee) of the Board of Directors that they
attend in addition to reimbursement for travel expenses. Directors who are
also employees of the Company are not compensated separately for their service
as directors of the Company or its subsidiaries.
STOCK OPTION PLANS FOR NON-EMPLOYEE DIRECTORS
Under the Stock Option Plan for Non-Employee Directors, the 1989 Stock
Option Plan for Non-Employee Directors, the 1991 Stock Option Plan for
Non-Employee Directors, the 1992 Stock Option Plan for Non-Employee Directors
and the 1993 Stock Option Plan for Non-Employee Directors (collectively, the
"DSOPs"), each of the then current non-employee directors of the Company was
granted options to purchase shares of Class A Common Stock and Class B Common
Stock and each then current non-employee director who was a member of the
Executive Committee of the Board of Directors was granted an option to purchase
additional shares of Class A Common Stock and Class B Common Stock. The
aggregate number of shares of Class A Common Stock subject to such options is
175,000 and of Class B Common Stock subject to such options is 213,571. The
exercise price for such options was the market price for the applicable Class A
Common Stock and Class B Common Stock on the dates when each of the DSOPs was
approved by the Compensation Committee, as ratified by the Company's
stockholders. No options granted under the DSOPs have been exercised.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Class A Common Stock. The following table shows, as of April 21,
1995, the beneficial ownership (shares owned or that may be acquired within
sixty (60) days) of Class A Common Stock by (a) each person known by the
Company to be the beneficial owner of more than five percent (5%) of the
outstanding Class A Common Stock, (b) each current director and executive
officer and (c) all of the Company's current executive officers and directors
as a group. Each share of Class B Common Stock is convertible at any time at
the option of the holder into one (1) share of Class A Common Stock. The right
to acquire Class A Common Stock in this manner is reflected in the following
table which assumes conversion of all beneficially owned shares of Class B
Common Stock set forth in the Class B Common Stock table which follows the
Class A Common Stock table below.
-9-
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER OF COMBINED
SHARES BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED OF CLASS+
----------------------- ------------------ ---------
<S> <C> <C> <C>
(a) Five percent (5%) holders:
FMR Corp. 2,956,250(1) 10.4%
82 Devonshire Street
Boston, Massachusetts 02109
Friends' Provident Life Office 2,364,962(2) 8.3%
15 Old Bailey
London EC4M 7AP United Kingdom
American Premier Group, Inc. 2,510,660(3) 8.1%
One East Fourth Street
Cincinnati, Ohio 45202
Electra Investment Trust P.L.C. 1,449,733 5.1%
65 Kingsway
London WC2B 6QT United Kingdom
(b) Directors and Executive Officers:
Peter Silvester 2,390,316(4) 8.4%
George P. Giard, Jr. 2,078,917(5) 7.2%
Robert L. Smith 1,588,544(6) 5.5%
Hugh A. L. Mumford 1,475,087(7) 5.2%
J. Howard Marshall, II 651,110(8) 2.3%
Peter H. Havens 141,928(9) *
Kendell V. Tholstrom 106,662(10) *
Raymond J. Kosi 96,767(11) *
Bruce R. DeBoer 59,623(12) *
Christopher S. Hardesty 41,812(13) *
William D. Benjes, Jr. 33,486(14) *
John W. Hyland, Jr. 6,250(15) *
(c) All directors and executive officers 7,308,182(16) 20.1%
as a group (12 persons):
</TABLE>
__________________
+ Percentages calculated in the manner required by SEC regulations.
* Does not exceed one percent (1%) of the class.
(1) Fidelity International Limited ("FIL"), which may be deemed to be an
affiliate of FMR Corp. ("FMR") that provides investment advisory and
management services to a number of non-United States investment
companies and certain institutional investors, beneficially owns
2,956,250 shares of Class A Common Stock as to which it has sole
investment and voting power. According to Amendment No. 8 to
Schedules 13D dated March 10, 1995, filed by both FMR and FIL, Edward
C. Johnson III, Chairman of FIL, and Chief Executive Officer of FMR,
may be deemed to share investment power over the shares beneficially
owned by FMR and FIL.
(2) Includes 1,507,143 shares of Class A Common Stock beneficially owned
by UKP Holdings Inc., a subsidiary of Friends. Also includes 115,500
shares of Class B Common Stock beneficially owned by Friends.
(3) Pursuant to a Schedule 13D dated April 19, 1995 filed by American
Premier Group, Inc. ("American Premier") and its subsidiary, American
Financial Corporation ("AFC"), all such shares of Class A Common Stock
are issuable upon conversion of the Company's 9% Convertible
Subordinated Debentures Due 2015 (the "Debentures"). Carl H. Lindner,
Carl H. Lindner III, S. Craig Lindner
-10-
<PAGE> 11
and Keith E. Lindner (collectively, the "Lindner Family") who own
common stock in American Premier and AFC and serve as directors and
officers thereof, may be deemed to be controlling persons. One half
of the shares represented by these Debentures are held by each of
Great American Insurance Company ("GAI"), a direct subsidiary of AFC,
and Great American Life Insurance Company ("GALIC"), a second-tier
subsidiary of American Premier. American Premier, AFC, the Lindner
Family, GAI and GALIC share voting and investment power in respect of
such shares.
(4) Mr. Silvester, as an officer of Friends, may be deemed to be the
beneficial owner of 2,249,462 shares of Class A Common Stock and
115,500 shares of Class B Common Stock listed in the table above as
being beneficially owned by Friends. Such number includes 6,250
shares of Class A Common Stock and 19,104 shares of Class B Common
Stock that may be acquired upon the exercise of options granted under
the DSOPs, but does not include 18,750 unvested shares of Class A
Common Stock and 7,500 unvested shares of Class B Common Stock granted
under the DSOPs.
(5) Includes 19,359 shares of Class B Common Stock. Also includes 11,030
shares of Class A Common Stock and 157,209 shares of Class B Common
Stock that may be acquired pursuant to the exercise of warrants held
in the name of Oil and Gas Finance Limited, an entity over which Mr.
Giard exercises voting control; 69,750 shares of Class A Common Stock
and 313,539 shares of Class B Common Stock that may be acquired upon
the exercise of options and 40,371 shares of Class A Common Stock and
17,393 shares of Class B Common Stock held in trust in Mr. Giard's
individual account under the ESOP, all of which are vested. Includes
978,224 shares of Class A Common Stock and 384,096 shares of Class B
Common Stock held by the ESOP which have not been allocated to
participating employees' accounts. Mr. Giard acts as a co-trustee of
the ESOP with Mr. Smith and may be deemed to share voting or
dispositive power with respect to such unallocated shares; however,
Mr. Giard disclaims beneficial ownership of any of such unallocated
shares. Does not include 290,250 unvested shares of Class A Common
Stock and 100,000 unvested shares of Class B Common Stock granted
pursuant to options.
(6) Includes 10,621 shares of Class B Common Stock. Also includes 31,250
shares of Class A Common Stock and 105,622 shares of Class B Common
Stock that may be acquired upon the exercise of options and 30,811
shares of Class B Common Stock pursuant to the exercise of a warrant.
Includes 32,858 shares of Class A Common Stock and 11,918 shares of
Class B Common Stock held in trust in Mr. Smith's individual account
under the ESOP, all of which are vested. Includes 978,224 shares of
Class A Common Stock and 384,096 shares of Class B Common Stock held
by the ESOP which have not been allocated to participating employees'
accounts. Mr. Smith acts as a co-trustee of the ESOP with Mr. Giard
and may be deemed to share voting or dispositive power with respect to
such unallocated shares; however, Mr. Smith disclaims beneficial
ownership of any of such unallocated shares. Does not include 150,750
unvested shares of Class A Common Stock and 52,000 unvested shares of
Class B Common Stock granted pursuant to options.
(7) Mr. Mumford, as an officer of Electra, may be deemed to be the
beneficial owner of 1,449,733 shares of Class A Common Stock
beneficially owned by Electra. Such number includes 6,250 shares of
Class A Common Stock and 19,104 shares of Class B Common Stock that
may be acquired upon the exercise of options granted under the DSOPs,
but does not include 18,750 unvested shares of Class A Common Stock
and 7,500 unvested shares of Class B Common Stock granted under the
DSOPs.
(8) Includes 7,258 shares of Class A Common Stock held in the name of
Marshall Associates, a general partnership, of which Mr. Marshall is
a general partner and 67,465 shares of Class A Common Stock held in
the name of Marshall Petroleum, Inc., of which Mr. Marshall is
Chairman. Such number
-11-
<PAGE> 12
includes 6,250 shares of Class A Common Stock and 19,104 shares of
Class B Common Stock that may be acquired upon the exercise of options
granted under the DSOPs, but does not include 18,750 unvested shares
of Class A Common Stock and 7,500 unvested shares of Class B Common
Stock granted under the DSOPs.
(9) Includes 45,000 shares of Class A Common Stock and 40,000 shares of
Class B Common Stock held in a grantor retained income trust in
respect of which Mr. Havens' spouse is a co-trustee and
co-beneficiary. Mr. Havens is the trust's investment advisor. Also
includes 500 shares of Class A Common Stock and 5,000 shares of Class
B Common Stock held in the name of Mr. Havens' spouse and 600 shares
of Class A Common Stock and 6,000 shares of Class B Common Stock in a
trust over which Mr. Havens shares voting and investment power.
Includes 6,250 shares of Class A Common Stock and 38,578 shares of
Class B Common Stock that may be acquired upon the exercise of options
granted under the DSOPs, but does not include 18,750 unvested shares
of Class A Common Stock and 15,000 unvested shares of Class B Common
Stock granted under the DSOPs.
(10) Includes 13,000 shares of Class A Common Stock and 49,274 shares of
Class B Common Stock that may be acquired upon the exercise of options
and 29,519 shares of Class A Common Stock and 12,719 shares of Class B
Common Stock held in the trust under the ESOP, all of which are
vested. Does not include 62,500 unvested shares of Class A Common
Stock and 19,000 unvested shares of Class B Common Stock granted
pursuant to options.
(11) Includes 51,939 shares of Class B Common Stock. Also includes 6,250
shares of Class A Common Stock and 38,578 shares of Class B Common
Stock that may be acquired upon the exercise of options granted under
the DSOPs. Such number does not include 18,750 unvested shares of
Class A Common Stock and 15,000 unvested shares of Class B Common
Stock granted under the DSOPs.
(12) Includes 15,919 shares of Class A Common Stock and 7,246 shares of
Class B Common Stock held in trust under the ESOP, all of which are
vested. Also includes 20,458 shares of Class B Common Stock which may
be acquired pursuant to the exercise of options. Does not include
47,000 unvested shares of Class A Common Stock and 13,000 unvested
shares of Class B Common Stock granted pursuant to options.
(13) Includes 15,000 shares that may be acquired by Mr. Hardesty pursuant
to the exercise of a warrant. On January 15, 1993, the Company
entered into an agreement with Mr. Hardesty whereby he purchased for
$2,250 a warrant to acquire 15,000 shares at an exercise price of
$1.0625 per share, the market price on the date of the warrant.
Includes 4,640 shares of Class A Common Stock and 2,172 shares of
Class B Common Stock held in trust under the ESOP, 1,856 and 869
shares of which, respectively, are vested. Also includes 20,000
shares of Class A Common Stock that may be acquired upon the exercise
of options. Does not include 88,000 unvested shares of Class A Common
Stock granted pursuant to options.
(14) Includes 2,132 shares of Class A Common Stock issuable upon conversion
of Debentures held in accounts over which Mr. Benjes shares investment
power. Such number also includes 6,250 shares of Class A Common Stock
and 19,104 shares of Class B Common Stock that may be acquired
pursuant to the exercise of options under the DSOPs, but does not
include 18,750 unvested shares of Class A Common Stock and 7,500
unvested shares of Class B Common Stock granted under the DSOPs.
(15) Includes 6,250 shares of Class A Common Stock that may be acquired
upon exercise of options granted under the DSOPs, but does not include
18,750 unvested shares of Class A Common Stock granted under the
DSOPs.
(16) Includes an aggregate of 123,307 shares of Class A Common Stock and
51,448 shares of Class B Common Stock held in trust under the ESOP for
officers of the Company as well as the unallocated ESOP shares
described in footnotes 5 and 6 as beneficially owned by both Mr. Giard
and Mr. Smith, as ESOP co-trustees; 144,000 shares of Class A Common
Stock and 488,893 shares of Class
-12-
<PAGE> 13
B Common Stock which may be acquired by officers of the Company upon
the exercise of options; 26,030 shares of Class A Common Stock and
188,020 shares of Class B Common Stock that may be acquired by an
executive officer, or an entity over which Mr. Giard exercises voting
control, pursuant to the exercise of certain warrants; and 153,572
shares of Class B Common Stock which may be acquired by directors of
the Company upon exercise of options granted under the DSOPs.
Class B Common Stock. The following table shows, as of April 21,
1995, the beneficial ownership (shares owned or that may be acquired within
sixty (60) days) of Class B Common Stock by (a) each person known by the
Company to be the beneficial owner of more than five percent (5%) of the
outstanding Class B Common Stock, (b) each current director and executive
officer and (c) all of the Company's current executive officers and directors
as a group.
<TABLE>
<CAPTION>
NUMBER OF COMBINED
SHARES BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED OF CLASS+
----------------------- ------------------ ---------
<S> <C> <C> <C>
(a) Five percent (5%) holders:
Mary L. Smith 1,085,019 33.7%
Kewanee Enterprises
101 Bryn Mawr Avenue, Suite 200
Bryn Mawr, Pennsylvania 19010
Employee Stock Ownership Plan of 384,096 11.9%
Presidio Oil Company
c/o Presidio Oil Company
5613 DTC Parkway, Suite 750
Englewood, Colorado 80111
Philip S. Sirianni 264,129(1) 8.1%
23041 Avenida de la Carlota, Suite 210
Laguna Hills, California 92653
(b) Directors and Executive Officers:
George P. Giard, Jr. 891,596(2) 24.2%
Robert L. Smith 543,068(3) 16.2%
Peter Silvester 134,604(4) 4.2%
Raymond J. Kosi 90,517(5) 2.8%
Peter H. Havens 89,578(6) 2.8%
Kendell V. Tholstrom 57,385(7) 1.9%
Bruce R. DeBoer 27,704(8) *
William D. Benjes, Jr. 19,104(9) *
J. Howard Marshall, II 19,104(9) *
Hugh A. L. Mumford 19,104(9) *
Christopher S. Hardesty -0- -0-
John W. Hyland, Jr. -0- -0-
(c) All directors and executive officers 1,507,668(10) 27.9%
as a group (12 persons):
</TABLE>
__________________
+ Percentages calculated in the manner required by SEC regulations.
* Does not exceed one percent (1%) of the class.
(1) Includes 41,659 shares issuable upon the exercise of stock options
granted in 1987, 1988, 1989 and 1993 in consideration of the provision
of advisory services to the Company, all of which are vested.
-13-
<PAGE> 14
(2) Includes 157,209 shares that may be acquired pursuant to the exercise
of warrants held in the name of Oil and Gas Finance Limited, an entity
over which Mr. Giard exercises voting control, 313,539 shares that may
be acquired upon the exercise of options, and 17,393 shares held in
trust under the ESOP, all of which are vested. Also includes 384,096
shares held by the ESOP which have not been allocated to participating
employees' accounts. Mr. Giard acts as a co-trustee of the ESOP and
may be deemed to share voting or dispositive power with respect to
such unallocated shares; however, Mr. Giard disclaims beneficial
ownership of any of such unallocated shares. Does not include 100,000
unvested shares granted pursuant to options.
(3) Includes 30,811 shares that may be acquired by Mr. Smith pursuant to
the exercise of a warrant, 105,622 shares that may be acquired upon
the exercise of options, and 11,918 shares held in trust under the
ESOP, all of which are vested. Also includes 384,096 shares held by
the ESOP which have not been allocated to participating employees'
accounts. Mr. Smith acts as a co-trustee of the ESOP and may be
deemed to share voting or dispositive power with respect to such
unallocated shares; however, Mr. Smith disclaims beneficial ownership
of any of such unallocated shares. Does not include 52,000 unvested
shares granted pursuant to options.
(4) Includes 115,500 shares held by Friends over which Mr. Silvester may
have investment power and 19,104 shares issuable upon the exercise of
options granted under the DSOPs, all of which are vested. Does not
include 7,500 unvested shares granted under the DSOPs.
(5) Includes 38,578 shares issuable upon the exercise of options granted
under the DSOPs, but does not include 15,000 unvested shares granted
under the DSOPs.
(6) Includes 38,578 shares issuable upon the exercise of options granted
under the DSOPs, 6,000 shares in a trust over which Mr. Havens shares
voting and investment power, 5,000 shares held in the name of Mr.
Havens' spouse and 40,000 shares held in a grantor retained income
trust in respect of which Mr. Havens' spouse is a co-trustee and
co-beneficiary and Mr. Havens is the investment advisor. Does not
include 15,000 unvested shares granted under the DSOPs.
(7) Includes 46,839 shares issuable upon the exercise of options and
10,546 shares held in trust under the ESOP, all of which are vested.
Does not include 21,435 unvested shares granted pursuant to options.
(8) Includes 20,458 shares issuable upon the exercise of options and 7,246
shares held in trust under the ESOP, all of which are vested. Does
not include 13,000 unvested shares granted pursuant to options.
(9) All of such shares are issuable upon the exercise of options granted
under the DSOPs. Does not include 7,500 unvested shares granted
pursuant to the DSOPs.
(10) Includes an aggregate 642,465 shares which may be acquired by officers
and directors of the Company upon the exercise of options. Also
includes 188,020 shares that may be acquired by executive officers, or
an entity over which Mr. Giard exercises voting control, pursuant to
the exercise of certain warrants. Also includes 51,448 shares held in
trust under the ESOP for executive officers of the Company and the
unallocated ESOP shares described above in footnotes 2 and 3 as
beneficially owned by Mr. Giard and Mr. Smith, as ESOP co-trustees,
all but 1,303 of which are vested.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There are no relationships, transactions or indebtedness involving
directors, officers or security holders since the beginning of the Registrant's
last fiscal year that require disclosure under regulations applicable to this
item.
-14-
<PAGE> 15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PRESIDIO OIL COMPANY
--------------------------------------
Registrant
DATE: April 28, 1995 /s/ Christopher S. Hardesty
-------------------- --------------------------------------
Christopher S. Hardesty
Chief Financial Officer and Treasurer
(Principal Financial Officer)
DATE: April 28, 1995 /s/ Charles E. Brammeier
-------------------- --------------------------------------
Charles E. Brammeier
Controller
(Principal Accounting Officer)
-15-
