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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 Section 240.14a-11(c) or Section 240.14a-12
VINTAGE PETROLEUM, INC.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO APPEARS HERE]
VINTAGE PETROLEUM, INC.
4200 ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998
To the Stockholders of
VINTAGE PETROLEUM, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Vintage
Petroleum, Inc., a Delaware corporation (the "Company"), will be held in the
Green Room on the 9th Floor, Bank of Oklahoma Tower, One Williams Center, Tulsa,
Oklahoma, on Tuesday, May 12, 1998, at 10:00 a.m., local time, for the following
purposes:
1. To elect two directors to Class II for three-year terms;
2. To consider and act upon a proposal to approve an amendment to the
Vintage Petroleum, Inc. 1990 Stock Plan as described in the
accompanying proxy statement;
3. To consider and act upon a proposal to ratify the appointment of
Arthur Andersen LLP as the independent auditor of the Company for
1998; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 25, 1998,
as the record date for the meeting, and only holders of the Company's Common
Stock of record at such time will be entitled to vote at the meeting or any
adjournment thereof. A complete list of the stockholders entitled to vote at
the meeting will be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of 10 days
prior to the date of the meeting at the offices of the Company and at the time
and place of the meeting.
By Order of the Board of Directors,
/s/ WILLIAM C. BARNES
William C. Barnes
Secretary
Tulsa, Oklahoma
March 31, 1998
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON.
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[LOGO APPEARS HERE]
VINTAGE PETROLEUM, INC.
4200 ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Vintage Petroleum, Inc., a Delaware corporation (the
"Company"), of proxies to be voted at the Annual Meeting of Stockholders of the
Company to be held on May 12, 1998, or at any adjournment thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. This Proxy Statement and accompanying proxy were first forwarded on or
about March 31, 1998, to stockholders of record on March 25, 1998.
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. If a stockholder
indicates in his or her proxy a choice with respect to any matter to be acted
upon, that stockholder's shares will be voted in accordance with such choice.
If no choice is indicated, such shares will be voted "FOR" (a) the election of
all of the nominees for directors listed below, (b) the approval of the
amendment to the Vintage Petroleum, Inc. 1990 Stock Plan, and (c) the
ratification of the appointment of the independent auditor. A stockholder
giving a proxy may revoke it by giving written notice of revocation to the
Secretary of the Company at any time before it is voted, by executing another
valid proxy bearing a later date and delivering such proxy to the Secretary of
the Company prior to or at the Annual Meeting, or by attending the Annual
Meeting and voting in person.
The expenses of this proxy solicitation, including the cost of preparing
and mailing this Proxy Statement and accompanying proxy will be borne by the
Company. Such expenses will also include the charges and expenses of banks,
brokerage firms, and other custodians, nominees or fiduciaries for forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. Solicitation of proxies may be made by mail, telephone,
personal interviews or by other means by the Board of Directors or employees of
the Company who will not be additionally compensated therefor, but who may be
reimbursed for their out-of-pocket expenses in connection therewith.
All information in this Proxy Statement relating to the shares of the
Company's Common Stock and per share amounts has been adjusted, as the case may
be, to reflect a two-for-one Common Stock split effected on October 7, 1997.
STOCKHOLDERS ENTITLED TO VOTE
Stockholders of record at the close of business on March 25, 1998 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the
Record Date, there were issued and outstanding 51,636,086 shares of Common
Stock, par value $.005 per share (the "Common Stock"), of the Company. Each
share of Common Stock is entitled to one vote. There is no cumulative voting
with respect to the election of directors. The presence in person or by proxy
of the holders of a majority of the shares issued and outstanding at the Annual
Meeting and entitled to vote will constitute a quorum for the transaction of
business. Votes withheld from nominees for directors, abstentions and broker
non-votes will be counted for purposes of determining whether a quorum has been
reached.
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Votes will be tabulated by an inspector of election appointed by the Board of
Directors of the Company. With regard to the election of directors, votes may be
cast in favor of or withheld from each nominee; votes that are withheld will
have the effect of a negative vote. Abstentions, which may be specified on all
proposals except the election of directors, will have the effect of a negative
vote. Under applicable Delaware law, a broker non-vote will have no effect on
the outcome of the election of directors or the other proposals.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation (the "Charter") of the Company
provides that the Board of Directors of the Company (the "Board of Directors")
shall consist of not less than three nor more than fifteen directors, as
determined from time to time by resolution of the Board of Directors. The number
of directors is currently fixed at seven. The Board of Directors is divided
into three approximately equal classes. The terms of such classes are staggered
so that only one class is elected at the annual meeting of stockholders each
year for a three-year term. The term of the Class II directors, consisting of
Jo Bob Hille and Bryan H. Lawrence, will expire at the Annual Meeting, and the
accompanying proxy solicits your vote for two Class II directors. The terms of
the Class III directors and the Class I directors will expire at the annual
meeting of stockholders to be held in 1999 and 2000, respectively.
The Board of Directors has nominated Jo Bob Hille and Bryan H. Lawrence for
re-election as Class II directors. The persons named as proxies in the
accompanying proxy, who have been designated by the Board of Directors, intend
to vote, unless otherwise instructed in such proxy, for the election of Messrs.
Hille and Lawrence. Should any of the nominees become unable for any reason to
stand for election as a director of the Company, it is intended that the persons
named in such proxy will vote for the election of such other person as the Board
of Directors may recommend. The Company knows of no reason why any of the
nominees will be unavailable or unable to serve.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the election of directors. The Board of Directors recommends a vote "FOR" each
of the following nominees for directors.
NOMINEES FOR DIRECTORS
CLASS II
(TERM EXPIRES MAY 2001)
JO BOB HILLE, age 56. Mr. Hille, a co-founder of the Company, has been a
Director of the Company since June 1983 and Vice Chairman of the Board of
Directors of the Company since September 1995. He was also President of the
Company from May 1990 to September 1995, Chief Executive Officer of the Company
from March 1994 to December 1997, Chief Operating Officer of the Company from
April 1987 to March 1994, Executive Vice President of the Company from June 1983
to May 1990 and Treasurer and Secretary of the Company from June 1983 to April
1987. From August 1972 to March 1983, Mr. Hille was employed by Santa Fe -
Andover Oil Company (formerly Andover Oil Company), an independent oil and gas
company ("Andover"), where he served at various times primarily as Executive
Vice President and Vice President - Operations. Mr. Hille has a B.S. Degree in
Petroleum Engineering from the University of Tulsa, and has approximately 32
years of oil and gas experience.
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BRYAN H. LAWRENCE, age 55. Mr. Lawrence has been a Director of the Company
since January 1987. He is a founder and a senior manager of Yorktown Partners
LLC which manages investment partnerships formerly affiliated with Dillon, Read
& Co. Inc., an investment banking firm ("Dillon Read"). Mr. Lawrence had been
employed by Dillon Read since 1966, serving most recently as a Managing Director
until the merger of Dillon Read with SBC Warburg in September 1997. Mr.
Lawrence also serves as a Director of D & K Wholesale Drug, Inc., Hallador
Petroleum Company, TransMontaigne Oil Company and Willbros Group, Inc. (each a
United States public company), Benson Petroleum Ltd. and Cavell Energy Corp.
(each a Canadian public company) and certain non-public companies in the energy
industry in which Yorktown partnerships hold equity interests including Meenan
Oil Co., Inc., Fintube Limited Partnership, PetroSantander Inc., Strega Energy,
Inc., Savoy Energy, L.P., Concho Resources Inc and Ricks Exploration, Inc. Mr.
Lawrence is a graduate of Hamilton College and also has an M.B.A. from Columbia
University.
DIRECTORS CONTINUING IN OFFICE
CLASS III
(TERM EXPIRES MAY 1999)
CHARLES C. STEPHENSON, JR., age 61. Mr. Stephenson, a co-founder of the
Company, has been a Director since June 1983 and Chairman of the Board of
Directors of the Company since April 1987. He was also Chief Executive Officer
of the Company from April 1987 to March 1994 and President of the Company from
June 1983 to May 1990. From October 1974 to March 1983, he was President of
Andover, and from January 1973 to October 1974, he was Vice President of
Andover. Mr. Stephenson also serves as a Director of AAON, Inc. Mr. Stephenson
has a B.S. Degree in Petroleum Engineering from the University of Oklahoma, and
has approximately 38 years of oil and gas experience.
S. CRAIG GEORGE, age 45. Mr. George has been a Director since October
1991, President of the Company since September 1995 and Chief Executive Officer
of the Company since December 1997. He was also Chief Operating Officer of the
Company from March 1994 to December 1997, an Executive Vice President of the
Company from March 1994 to September 1995 and a Senior Vice President of the
Company from October 1991 to March 1994. From April 1991 to October 1991, Mr.
George was Vice President of Operations and International with Santa Fe
Minerals, Inc., an independent oil and gas company ("Santa Fe Minerals"). From
May 1981 to March 1991, he served in various other management and executive
capacities with Santa Fe Minerals and its subsidiary, Andover. From December
1974 to April 1981, Mr. George held various management and engineering positions
with Amoco Production Company. He has a B.S. Degree in Mechanical Engineering
from the University of Missouri-Rolla.
JOHN T. MCNABB, II, age 53. Mr. McNabb has been a Director of the Company
since October 1990. He has been Chief Executive Officer of Growth Capital
Partners, Inc., an investment and advisory firm in Houston, Texas serving
privately held and public middle market companies based in the Southwest, since
March 1992. From June 1990 to January 1992, he was a Managing Director of
Bankers Trust Company, managing commercial banking, investment banking and
financial advisory activities in the Southwest for Bankers Trust Company, and
head of BT Southwest, Inc., an affiliate of Bankers Trust New York Corporation.
From September 1984 to June 1990, Mr. McNabb was employed by investment
affiliates of The Prudential Insurance Company of America where he provided a
wide range of investment banking services and corporate finance expertise to
corporate clients. He holds undergraduate and graduate (M.B.A.) degrees from
Duke University.
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CLASS I
(TERM EXPIRES MAY 2000)
WILLIAM C. BARNES, age 43. Mr. Barnes, a certified public accountant, has
been a Director, Treasurer and Secretary of the Company since April 1987, an
Executive Vice President of the Company since March 1994 and Chief Financial
Officer of the Company since May 1990. He was also a Senior Vice President of
the Company from May 1990 to March 1994 and Vice President - Finance of the
Company from January 1984 to May 1990. From November 1982 to December 1983, Mr.
Barnes was an audit manager for Arthur Andersen & Co., an independent public
accounting firm, where he dealt primarily with clients in the oil and gas
industry. He was Assistant Controller - Finance of Andover from December 1980
to November 1982. From June 1976 to December 1980, he was an auditor with
Arthur Andersen & Co., where he dealt primarily with clients in the oil and gas
industry. Mr. Barnes has a B.S. Degree in Business Administration from Oklahoma
State University.
The other Board position in Class I is currently vacant.
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or any committee thereof. Non-employee directors receive an
annual retainer of $12,000. Non-employee directors also automatically receive
non-qualified stock options under the Vintage Petroleum, Inc. Non-Management
Director Stock Option Plan (the "Director Plan"). Under the Director Plan, an
initial option to purchase up to 5,000 shares of Common Stock is granted to any
new non-employee director on the date of the organizational board meeting (the
board meeting immediately following the annual stockholders meeting) at which he
or she first serves as a member of the Board of Directors. Each non-employee
director also receives annually an option to purchase 1,000 shares of Common
Stock on the date of the organizational board meeting next following the date on
which such director received an initial option and on the date of each
succeeding organizational board meeting during the period of such director's
incumbency. The option exercise price of each option granted under the Director
Plan is equal to the fair market value of the Common Stock on the date of grant.
A total of 60,000 shares of Common Stock are available for issuance under the
Director Plan. During fiscal 1997, Messrs. Lawrence and McNabb were each
granted an option to purchase 1,000 shares (2,000 shares after giving effect to
the two-for-one Common Stock split effected on October 7, 1997) of Common Stock
at an exercise price of $16.0625 per share. No options have been exercised
under the Director Plan. All directors are reimbursed by the Company for out-
of-pocket expenses incurred by them in connection with their service on the
Board of Directors and any committee thereof.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1997, the Board of Directors held four meetings. All of the
directors were present at each meeting. In addition, the Board of Directors
took action six times during 1997 by unanimous written consent. The Board of
Directors has a standing Audit Committee and a standing Compensation Committee.
The Audit Committee is composed of Messrs. Lawrence and McNabb. The Audit
Committee annually considers the qualifications of the independent auditor of
the Company and makes recommendations to the Board of Directors on the
engagement of the independent auditor. The Audit Committee also reviews (a) any
transactions between the Company and its officers, directors and principal
stockholders, (b) the plans for and results of audits of the Company, and (c)
the results of any internal audits, compliance with any of the Company's written
policies and procedures and the adequacy of the Company's system of internal
accounting controls. The Audit Committee met twice during 1997. All of the
members of the Audit Committee were present at each meeting.
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The Compensation Committee is composed of Messrs. Stephenson, Hille,
Lawrence and McNabb. The Compensation Committee reviews the compensation of
officers of the Company and makes recommendations to the Board of Directors
regarding such compensation and reviews the Company's executive compensation
policies and practices. The Compensation Committee also administers generally
the Company's 1990 Stock Plan, except that the Board of Directors administers
such Plan with respect to certain matters pertaining to officers of the Company.
The Compensation Committee met once during 1997. All of the members of the
Compensation Committee were present at such meeting. In addition, the
Compensation Committee took action once during 1997 by unanimous written
consent.
The Company does not have a standing Nominating Committee. The Company's
Charter provides that nominations of candidates for election as directors of the
Company may be made at a meeting of stockholders by or at the direction of the
Board of Directors or by any stockholder entitled to vote at such meeting who
complies with the advance notice procedures set forth therein. These procedures
require any stockholder who intends to make a nomination for director at the
meeting to deliver notice of such nomination to the Secretary of the Company not
less than 45 nor more than 90 days before the meeting. The notice must contain
all information about the proposed nominee as would be required to be included
in a proxy statement soliciting proxies for the election of such nominee,
including such nominee's written consent to serve as a director if so elected.
If the Chairman of the meeting determines that a person is not nominated in
accordance with the nomination procedure, such nomination will be disregarded.
The Company's By-laws provide that the annual meeting of stockholders to be held
each year will be on the second Tuesday in May.
PROPOSAL TWO
APPROVAL OF AMENDMENT NUMBER 4 TO
THE VINTAGE PETROLEUM, INC.
1990 STOCK PLAN
GENERAL
Stockholder action at the Annual Meeting will be requested with respect to
the approval of Amendment Number 4 (the "Amendment") to the Vintage Petroleum,
Inc. 1990 Stock Plan, as amended (the "1990 Plan"). The purpose of the
Amendment is to (a) increase the total number of shares of Common Stock
available for issuance under the 1990 Plan from 4,500,000 shares to 6,000,000
shares and (b) extend the date until which incentive stock options may be
granted under the 1990 Plan to 10 years from the date on which the Amendment is
approved by the stockholders of the Company (i.e., May 11, 2008). The Amendment
does not extend the date by which incentive stock options already granted under
the 1990 Plan must be exercised. As of March 11, 1998, there were no remaining
shares of Common Stock available for future grants of awards under the 1990
Plan. If the Amendment to the 1990 Plan is approved by the stockholders of the
Company, the total number of shares of Common Stock subject to outstanding stock
options and reserved for future grants of awards under the 1990 Plan would be
5,197,122 shares and represent approximately 10 percent of the Company's total
outstanding shares of Common Stock on March 11, 1998.
A copy of the Amendment is attached hereto as Exhibit A. The Amendment,
which was approved by the Board of Directors on March 11, 1998, will not take
effect unless approved by the affirmative vote of the holders of a majority of
the shares of Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote. The purpose of the 1990 Plan is to
strengthen the ability of the Company to attract and retain well-qualified
executive and managerial personnel and to encourage stock ownership by such
personnel in order to increase their proprietary interest in the Company's
success. The Company relies heavily upon stock options to compensate its
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executive and managerial personnel and desires to continue that practice because
it believes that stock options encourage and reward effective management that
results in long-term corporate financial success, as measured by stock price
appreciation.
SUMMARY OF THE 1990 PLAN
General. On June 1, 1990, the Board of Directors adopted, and the
stockholders of the Company approved, the 1990 Plan. Since then, the Board of
Directors and the stockholders of the Company have approved amendments to the
1990 Plan which increased the total number of shares of Common Stock available
for issuance pursuant to awards granted under the 1990 Plan to the current
4,500,000 shares. The 1990 Plan provides for awards to key employees of the
Company, including officers and directors who are also employees of the Company.
The 1990 Plan contains no limitation on the number of shares that may be
awarded to any participant. The stock issuable under the 1990 Plan may be
authorized and unissued shares or treasury shares. If any shares subject to any
award are forfeited or payment is made in a form other than shares or the award
otherwise terminates without payment being made, the shares subject to such
awards will again be available for issuance under the 1990 Plan. In addition,
the number of shares deemed to be issued under the 1990 Plan upon exercise of a
stock option will be reduced by the number of shares surrendered in payment of
the exercise or purchase price of such stock option.
Except as discussed below, the 1990 Plan is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The members
of the Committee are not eligible for awards under the 1990 Plan. The Committee
is authorized to determine plan participants, the types and amount of awards to
be granted and the terms, conditions and provisions of awards, prescribe forms
of award agreements, interpret the 1990 Plan, establish, amend and rescind rules
and regulations relating to the 1990 Plan and make all other determinations
which may be necessary or advisable for the administration of the 1990 Plan.
Any and all powers, authorizations and discretions granted by the 1990 Plan to
the Committee are likewise exercisable at any time by the Board of Directors.
The Board of Directors currently administers the 1990 Plan with respect to
officers of the Company. Although a determination has not been made as to the
number of employees currently eligible for consideration as participants in the
1990 Plan, there are 39 employees who currently hold awards under the 1990 Plan.
Summary of Awards. The 1990 Plan permits the granting of any or all of the
following types of awards: (a) stock options, (b) stock appreciation rights
("SARs"), and (c) restricted stock. Generally, awards under the 1990 Plan are
granted for no consideration other than prior and future services. Awards
granted under the 1990 Plan may, in the discretion of the Committee, be granted
alone or in addition to, in tandem with or in substitution for any other award
under the 1990 Plan or other plan of the Company. Such grants could include
grants of options after a decline in the market price of the Company's Common
Stock in substitution for previously granted options having a higher exercise
price. The Company, however, has never "repriced" options previously granted.
Stock options granted pursuant to the 1990 Plan may, at the discretion of
the Committee, be either incentive stock options ("ISOs"), within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, or non-qualified
stock options. The exercise price of an ISO may not be less than the fair
market value of the Common Stock on the date of grant (or 110 percent of such
fair market value in the case of ISOs granted to employees who possess more than
10 percent of the combined voting power of all classes of stock of the Company).
In the case of non-qualified stock options, the exercise price shall be as
determined by the Committee in its sole discretion, except that it shall not be
less than 85 percent of the fair market value of the Common Stock on the date of
grant. The Company, however, has never granted any options under the 1990 Plan
with an exercise price
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below the fair market value of the Common Stock on the date of grant. Options
granted pursuant to the 1990 Plan are exercisable in whole or in part at such
time or times as determined by the Committee, except that ISOs may not be
exercised after the expiration of ten years from the date granted. Generally,
options may be exercised by the payment of cash, promissory notes, stock or a
combination thereof.
Any SARs granted under the 1990 Plan will give the holder the right to
receive cash or stock in an amount equal to the difference between the fair
market value of a share of Common Stock on the date of exercise and the grant
price. The grant price of an SAR is determined by the Committee but may not be
less than the fair market value of a share of Common Stock on the date of grant.
Methods of exercise and settlement and other terms of SARs are determined by the
Committee.
The Committee may award restricted stock, generally consisting of shares
which may not be disposed of by participants until certain restrictions
established by the Committee lapse. Such restrictions may lapse in whole or in
installments as the Committee determines. A participant receiving restricted
stock will have all of the rights of a stockholder of the Company, including the
right to vote the shares and the right to receive any dividends, unless the
Committee otherwise determines. Upon termination of employment during the
restriction period, restricted stock will be forfeited, subject to such
exceptions, if any, as are authorized by the Committee.
Awards are not transferable other than by will or the laws of descent and
distribution. In the event of any change affecting the shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares, or other corporate
change or any distributions to Common Stock holders, the Committee may make such
substitution or adjustment in the aggregate number or kind of shares which may
be distributed under the 1990 Plan and in the number, kind and exercise, grant
or purchase price of shares subject to the outstanding awards granted under the
1990 Plan, or make provisions for a cash payment relating to any award, as it
deems to be appropriate in order to maintain the purpose of the original grant.
Amendment to and Termination of the 1990 Plan. The Board of Directors may
amend, alter, suspend, discontinue or terminate the 1990 Plan without the
consent of stockholders or participants, except that stockholder approval of
such action will be sought if such approval is required by any federal or state
law or regulation, or if the Board of Directors in its discretion determines
that obtaining such stockholder approval is advisable. Unless earlier
terminated by the Board of Directors, the 1990 Plan will terminate when no
shares remain reserved and available for issuance, and the Company has no
further obligation with respect to any award granted under the 1990 Plan.
The 1990 Plan currently provides that no ISO may be granted thereunder
after May 31, 2000. The Amendment would, by deleting this provision, extend the
date until which ISOs may be granted under the 1990 Plan to 10 years from the
date on which the Amendment is approved by the stockholders of the Company
(i.e., May 11, 2008).
Change of Control. In the event of a Change of Control of the Company, as
defined in the 1990 Plan, all outstanding awards under the 1990 Plan, regardless
of any limitations or restrictions, become fully exercisable and freed of all
restrictions. In such event, with certain exceptions, participants will receive
cash payments equal to the value of their outstanding awards based on the
"change of control price" as defined in the 1990 Plan.
Federal Income Tax Consequences. The Company believes that under present
Federal tax laws the following are the Federal income tax consequences generally
arising with respect to awards granted under the 1990 Plan. The grant of an
option or SAR, will create no tax consequences for the participant or the
Company. The participant will have no taxable income upon exercising an ISO
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(except that the alternative minimum tax may apply) and the Company will receive
no deduction at that time. Upon exercising an option other than an ISO, the
participant must generally recognize ordinary income equal to the difference
between the exercise price and the fair market value of the stock acquired on
the date of exercise. Upon exercising an SAR, the participant must generally
recognize ordinary income equal to the cash or the fair market value of the
stock received on the date of exercise. In each case, the Company generally
will be entitled to a deduction for the amount recognized as ordinary income by
the participant. The treatment to a participant of a disposition of shares
acquired upon the exercise of an SAR or option depends on how long the shares
have been held and on whether such shares are acquired by exercising an ISO or
by exercising an option other than an ISO. Generally, there will be no tax
consequences to the Company in connection with a disposition of shares acquired
under an option except that the Company will be entitled to a deduction (and the
employee will recognize ordinary taxable income) if shares acquired under an ISO
are disposed of before the applicable ISO holding periods have been satisfied.
With respect to awards granted under the 1990 Plan involving stock that is
restricted as to transferability and subject to a substantial risk of
forfeiture, the participant must generally recognize ordinary income equal to
the fair market value of the shares received at the earlier of the time at which
the shares become transferable or not subject to a substantial risk of
forfeiture. The Company generally will be entitled to a deduction for the same
amount. In certain circumstances, a participant may elect to be taxed at the
time of receipt of shares rather than upon lapse of restrictions on
transferability or the substantial risk of forfeiture.
The foregoing provides only a very general description of the application
of Federal income tax laws to awards under the 1990 Plan. The summary does not
address the effects of foreign, state and local tax laws. Because of the
complexities of the tax laws, participants under the 1990 Plan are strongly
urged to consult a tax advisor regarding these matters.
Awards Granted. As of March 11, 1998, incentive and non-qualified stock
options for a total of 3,697,122 shares at an average exercise price of $12.51
per share are outstanding under the 1990 Plan. All of these options were
granted at the fair market value of the Common Stock on the date of grant, and
expire at various times during the years 2001 to 2008. As of such date, no
other awards have been granted under the 1990 Plan. Since inception of the 1990
Plan, (a) options for a total of 802,878 shares have been exercised at an
average exercise price of $5.36 and (b) options for the following number of
shares have been granted under the 1990 Plan to the named executive officers of
the Company and specified groups: S. Craig George (President and Chief
Executive Officer), 770,000 shares; William C. Barnes (Executive Vice President
and Chief Financial Officer), 610,000 shares; William L. Abernathy (Executive
Vice President and Chief Operating Officer), 530,000 shares; Robert W. Cox (Vice
President-General Counsel), 210,000 shares; all current executive officers as a
group, 3,449,000 shares; and all employees, excluding executive officers, as a
group, 1,051,000 shares. Messrs. Stephenson (Chairman of the Board of
Directors) and Hille (Vice Chairman of the Board of Directors) and all current
directors who are not executive officers are not eligible to receive awards
under the 1990 Plan. Future awards under the 1990 Plan are not yet
determinable. The closing price for the Common Stock on the New York Stock
Exchange on March 11, 1998, was $20.00.
VOTE REQUIRED
The affirmative vote of a majority of the shares present in person or by
proxy at the Annual Meeting and entitled to vote is required for approval of the
Amendment. The Board of Directors recommends a vote "FOR" approval of the
Amendment.
-8-
<PAGE>
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP as the independent auditor of the Company for the
fiscal year ending December 31, 1998. Arthur Andersen LLP has been the
independent auditor of the Company since the Company's inception in 1983. A
proposal will be presented at the Annual Meeting asking the stockholders to
ratify the appointment of Arthur Andersen LLP as the Company's independent
auditor. If the stockholders do not ratify the appointment of Arthur Andersen
LLP, the Board of Directors will reconsider the appointment.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the adoption of this proposal. The Board of Directors recommends a vote "FOR"
the ratification of Arthur Andersen LLP as independent auditor for 1998.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting. Such representative will be given the opportunity to make a statement
if he desires to do so and will be available to respond to appropriate
questions.
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 11, 1998,
regarding the ownership of the Company's Common Stock by (a) all persons known
by the Company to be beneficial owners of more than five percent of such stock,
(b) each director and nominee for director of the Company, (c) each of the
executive officers of the Company named in the Summary Compensation Table below,
and (d) all executive officers and directors of the Company as a group. Unless
otherwise noted, the persons named below have sole voting and investment power
with respect to such shares.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE
NAME OF OWNER OR IDENTITY OF GROUP OWNED OF CLASS(1)
- ----------------------------------------- ---------------- -------------
<S> <C> <C>
Charles C. Stephenson, Jr.(2)............ 10,753,200 (3) 20.8%
Jo Bob Hille(2).......................... 4,200,000 (4) 8.1
William C. Barnes........................ 943,339 (5) 1.8
S. Craig George.......................... 492,457 (6) *
William L. Abernathy..................... 452,569 (7) *
Robert W. Cox............................ 338,332 (8) *
Bryan H. Lawrence........................ 56,900 (9) *
John T. McNabb, II....................... 28,744 (10) *
All executive officers and directors as
a group (15 persons)................ 17,882,296 (11) 33.8
</TABLE>
- --------------------
* Represents less than 1% of the Common Stock outstanding.
(1) Shares of Common Stock which were not outstanding but which could be
acquired by a person upon exercise of an option within sixty days of March
11, 1998, are deemed outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned by such person. Such
shares, however, are not deemed to be outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any
other person.
-9-
<PAGE>
(2) The stockholder's address is 4200 One Williams Center, Tulsa, Oklahoma
74172.
(3) Includes 244,000 shares held by the Stephenson Family Charitable
Foundation, of which Mr. Stephenson and his wife are co-trustees. Mr.
Stephenson and his wife do not have a pecuniary interest in the shares held
by the Foundation. Does not include 200 shares owned by Mr. Stephenson's
wife. Mrs. Stephenson has full rights of ownership over such shares,
including sole voting and investment power. Mr. Stephenson disclaims
beneficial ownership of such shares.
(4) Does not include 100,000 shares owned by the Jo Bob Hille and Mary Anne
Hille Charitable Remainder Trust. Mr. Hille disclaims beneficial ownership
of such shares.
(5) Includes 253,014 shares subject to stock options which are currently
exercisable at an average exercise price of $7.99 per share, and 2,325
shares held by the Vintage Petroleum, Inc. 401(k) Plan (the "401(k) Plan")
and allocated to the account of Mr. Barnes.
(6) Includes 349,960 shares subject to stock options which are currently
exercisable at an average exercise price of $7.41 per share, and 6,497
shares held by the 401(k) Plan and allocated to the account of Mr. George.
(7) Includes 164,554 shares subject to stock options which are currently
exercisable at an average exercise price of $8.73 per share, and 5,829
shares held by the 401(k) Plan and allocated to the account of Mr.
Abernathy.
(8) Includes 117,008 shares subject to stock options which are currently
exercisable at an average exercise price of $7.28 per share, and 6,332
shares held by the 401(k) Plan and allocated to the account of Mr. Cox.
(9) Includes 16,000 shares subject to stock options which are currently
exercisable at an average exercise price of $10.68 per share.
(10) Includes 16,000 shares subject to stock options which are currently
exercisable at an average exercise price of $10.68 per share. Does not
include 600 shares owned by Mr. McNabb's wife. Mrs. McNabb has full rights
of ownership over such shares, including sole voting and investment power.
Mr. McNabb disclaims beneficial ownership of such shares.
(11) Includes 1,206,830 shares subject to stock options which are currently
exercisable at an average exercise price of $8.17 per share, and 36,004
shares held by the 401(k) Plan and allocated to the accounts of such
individuals.
-10-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
compensation of the Company's Chairman of the Board of Directors, each person
who served as the Company's Chief Executive Officer during fiscal 1997 and each
of the Company's four most highly compensated executive officers other than the
Chief Executive Officer, based on salary and bonus earned during fiscal 1997,
for services in all capacities to the Company and its subsidiaries during each
of the Company's last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- ---------------------- ---------
SECURITIES
RESTRICTED UNDERLYING LONG-TERM
OTHER ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#)(2) ($) ($)(3)
- ---------------------------- ---- ------- ----- ------------ --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles C. Stephenson, Jr., 1997 40,000(4) -0- -0- -0- -0- -0- -0-
Chairman of the Board of 1996 40,000(4) -0- -0- -0- -0- -0- -0-
Directors 1995 40,000(4) -0- -0- -0- -0- -0- -0-
Jo Bob Hille, 1997 150,000 -0- -0- -0- -0- -0- -0-
Vice Chairman of the Board 1996 150,000 -0- -0- -0- -0- -0- -0-
of Directors and former 1995 150,000 -0- -0- -0- -0- -0- -0-
Chief Executive Officer
S. Craig George, 1997 190,000 -0- -0- -0- 70,000 -0- 9,500
President and Chief 1996 183,000 -0- -0- -0- 60,000 -0- 4,750
Executive Officer 1995 167,917 -0- -0- -0- 120,000 -0- 4,620
William C. Barnes, 1997 180,000 -0- -0- -0- 70,000 -0- 9,500
Executive Vice President 1996 173,000 -0- -0- -0- 80,000 -0- 4,750
and Chief Financial Officer 1995 165,000 -0- -0- -0- -0- -0- 4,620
Robert W. Cox, 1997 163,000 -0- -0- -0- 30,000 -0- 9,500
Vice President- 1996 160,000 -0- -0- -0- 30,000 -0- 4,750
General Counsel 1995 155,000 -0- -0- -0- -0- -0- 4,620
William L. Abernathy, 1997 144,000 -0- -0- -0- 50,000 -0- 8,180
Executive Vice President 1996 137,000 -0- -0- -0- 70,000 -0- 4,107
and Chief Operating Officer 1995 130,000 -0- -0- -0- -0- -0- 3,900
</TABLE>
- --------------------
(1) Does not include the value of perquisites and other personal
benefits because the aggregate amount of such compensation, if any,
does not exceed the lesser of $50,000 or 10 percent of the total
amount of annual salary and bonus for any named individual.
(2) Consists solely of options to acquire shares of Common Stock.
(3) Represents Company contributions to the 401(k) Plan.
(4) Mr. Stephenson is entitled to receive an annual base salary of
$100,000 pursuant to his employment agreement with the Company. He
has waived his right to receive the unpaid portion of his base
salary for 1997, 1996 and 1995. It is anticipated that the full
amount due under his employment agreement will not be paid during
1998.
-11-
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company during fiscal 1997. The
Company has never granted any stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE
UNDERLYING SARS AT ASSUMED ANNUAL RATES
OPTIONS/ GRANTED TO OF STOCK PRICE APPRECIATION
SARS EMPLOYEES EXERCISE OR FOR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------------
NAME (#)(1) YEAR ($/SH)(2) DATE 5%($) 10%($)
- ---------------------------- ---------- ---------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Stephenson, Jr. -0- -0- -0- -0- -0- -0-
Jo Bob Hille -0- -0- -0- -0- -0- -0-
S. Craig George 70,000(4) 8.7 15.50 3/6/07 682,351 1,729,211
William C. Barnes 70,000(4) 8.7 15.50 3/6/07 682,351 1,729,211
Robert W. Cox 30,000(4) 3.7 15.50 3/6/07 292,436 741,090
William L. Abernathy 50,000(4) 6.2 15.50 3/6/07 487,393 1,235,150
</TABLE>
_____________________________
(1) Consists solely of options to acquire shares of Common Stock. The options
were granted for a term of ten years, subject to earlier termination in
certain events related to termination of employment. The exercise price of
the options is equal to the fair market value of the Common Stock on the
date of grant. Under the terms of the Company's 1990 Stock Plan, the
Compensation Committee retains discretion, subject to plan limits, to
modify the terms of the options and to reprice the options. In the event
of a Change in Control, as defined in the Company's 1990 Stock Plan, the
options become fully exercisable immediately.
(2) The exercise price of the options is equal to the fair market value of the
Common Stock on the date of grant.
(3) Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term (ten years from the date of grant), assuming that the Common Stock
appreciates in value from the date of grant to the end of the option term
at rates of 5% and 10%, respectively, compounded annually.
(4) These options become exercisable in increments over a one-year period
beginning March 7, 2000. The option exercise price may be paid in cash, by
delivery of already-owned shares, or a combination thereof, or, at the
discretion of the Compensation Committee, by a promissory note. Tax
withholding obligations, if any, related to exercise may be paid by offset
of the underlying shares, subject to certain conditions.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company during fiscal 1997, and
the number and value of unexercised options held by such executive officers at
the end of the fiscal year. The Company has never granted any stock
appreciation rights.
-12-
<PAGE>
<TABLE>
SHARES VALUE OF UNEXERCISED
ACQUIRED NUMBER OF SECURITIES IN-THE-MONEY
ON VALUE UNDERLYING UNEXERCISED OPTIONS/SARS AT FY-END
EXERCISE REALIZED OPTIONS/SARS AT FY-END(#) ($)(1)(2)
-------------------------- --------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Stephenson, Jr. -0- -0- -0- -0- -0- -0-
Jo Bob Hille -0- -0- -0- -0- -0- -0-
S. Craig George 86,000 938,005 349,960 248,040 4,056,503 1,824,098
William C. Barnes 86,936 951,704 253,014 146,986 2,786,193 961,932
Robert W. Cox 61,592 660,368 117,008 60,000 1,370,892 384,375
William L. Abernathy 15,446 119,224 164,554 120,000 1,690,255 826,875
</TABLE>
(1) Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
(2) The closing price for the Common Stock on the New York Stock Exchange on
December 31, 1997, the last trading day of the fiscal year, was $19.00.
EMPLOYMENT AGREEMENTS AND CHANGE
IN CONTROL ARRANGEMENTS
The Company has employment agreements with two of the named executive
officers of the Company.
On January 7, 1987, the Company entered into employment agreements with
Messrs. Stephenson and Hille, now Chairman of the Board and Vice Chairman of the
Board of the Company, respectively. Each agreement provides for (a) an annual
base salary of $100,000, subject to review and adjustment (upwards only) by the
Board of Directors, and (b) such other compensation and benefits as determined
by the Board of Directors. The initial term of each agreement extended through
December 31, 1991, and each agreement is automatically extended for additional
periods of one year each until terminated by either the employee or the Company.
Each agreement further provides that in the event of termination of the
employee's employment prior to expiration of the term of such agreement (a) by
the Company for any reason other than death, disability, cause or the employee's
material breach of such agreement, or (b) by the employee as a result of a
material breach of such agreement by the Company, the employee will be entitled
to receive his base salary and other compensation and benefits to which he is
entitled for the balance of such term.
All outstanding awards under the Vintage Petroleum, Inc. 1990 Stock Plan,
regardless of any limitations or restrictions, become fully exercisable and free
of all restrictions, in the event of a Change in Control of the Company, as
defined in such Plan. In such event, with certain exceptions, participants will
receive cash payments equal to the value of their outstanding awards based on
the "change of control price" as defined in such Plan.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors administers the
Company's executive compensation program, except that the Board of Directors is
generally responsible for administering the Company's 1990 Stock Plan with
respect to the executive officers of the Company. During 1997, the Committee
was comprised of the two outside directors of the Company (Messrs. Lawrence and
McNabb), the Chairman of the Board of Directors of the Company (Mr. Stephenson)
and the Vice Chairman of the Board of Directors of the Company (Mr. Hille). All
decisions of the Committee relating to the compensation of the executive
officers of the Company are reviewed by the full Board of
-13-
<PAGE>
Directors. Members of the Committee are not eligible to receive options or
awards under the Company's 1990 Stock Plan.
Overall Executive Compensation Policy. The overall policy of the Company's
executive compensation program is to attract, retain and reward executives who
are capable of leading the Company in achieving its business objectives and
strategies in a highly competitive industry. The executive compensation program
basically consists of two elements: salary and stock options.
A 1993 amendment to the Internal Revenue Code of 1986, as amended, provides
that no publicly-held company shall be permitted to deduct from its income taxes
compensation exceeding $1 million paid to its chief executive officer or any of
its four other highest paid executive officers unless (a) the compensation is
payable solely on account of the attainment of performance goals, (b) the
performance goals are determined by a compensation committee of two or more
outside directors, (c) the material terms under which the compensation is paid
are disclosed to and approved by the stockholders, and (d) the compensation
committee certifies that the performance goals were met. Neither the Committee
nor the Company expects this amendment to have an impact, or result in the loss
of a material deduction, with respect to compensation paid to such executive
officers, including stock options granted to such executive officers.
Salary. The Committee reviews each executive officer's salary annually.
The employment agreements of certain executive officers of the Company set
certain minimum salary levels for such officers. The Committee believes there
is necessarily some subjectivity in setting the salaries of the Company's
executive officers and does not follow specific objective performance criteria
when setting such salaries. In determining appropriate salary levels for 1997,
the Committee primarily considered the individual's past performance, the past
performance of the Company and the individual's contribution to that
performance. The Committee also considered the executive's level and scope of
responsibility, experience, internal equity of the Company's executive
compensation program, and the compensation practices of other companies in the
oil and gas industry for executives of similar responsibility.
Stock Options. The Board of Directors relies heavily upon stock options to
compensate the executive officers of the Company. The Board of Directors
believes that stock options encourage and reward effective management that
results in long-term corporate financial success, as measured by stock price
appreciation. Options granted by the Board of Directors are generally not
exercisable until after three years from the date of grant. In addition, the
exercise price of options granted by the Board of Directors equals the fair
market value of the Common Stock on the date of grant. The Board of Directors
believes that granting options in this manner aligns the interests of the
Company's executives with those of the Company's stockholders since the value of
an option bears a direct relationship to the Company's stock price.
Options granted to executive officers during 1997 were based on the
subjective evaluation of the executive's ability to influence the Company's
long-term growth and profitability and to reward outstanding past individual
performance and contributions to the Company.
Chairman and CEO Compensation. Mr. Stephenson, who served as Chairman of
the Board of Directors of the Company during 1997, is entitled to receive an
annual base salary of $100,000 pursuant to his Employment Agreement with the
Company dated January 7, 1987, as described above. Mr. Stephenson, however,
elected to receive only $40,000 of his base salary for 1997, and waived his
right to receive the unpaid portion of his base salary for 1997. Mr. Stephenson
received no other compensation for 1997. Despite electing to receive minimal
compensation for his efforts, Mr. Stephenson, as the Company's largest single
stockholder, has strong incentive to create value for stockholders.
-14-
<PAGE>
Mr. Hille, who served as Chief Executive Officer of the Company until
December 1997, is entitled to receive a minimum annual base salary of $100,000
pursuant to his Employment Agreement with the Company dated January 7, 1987, as
described above. Mr. Hille's base salary is set in the same manner utilized by
the Committee when setting the salaries of the Company's other executive
officers as discussed above. Mr. Hille received no other compensation for 1997.
Mr. Hille, as one of the Company's largest stockholders, also has strong
incentive to create value for stockholders.
In December 1997, Mr. George, the President of the Company, also began
serving as Chief Executive Officer of the Company. His base salary for 1997 and
options granted to him during 1997 were determined in the same manner utilized
by the Committee and the Board of Directors when determining salaries and option
grants for the Company's other executive officers as described above.
Board of Directors Compensation Committee
- ------------------ ----------------------
Charles C. Stephenson, Jr. Charles C. Stephenson, Jr.
Jo Bob Hille Jo Bob Hille
S. Craig George Bryan H. Lawrence
William C. Barnes John T. McNabb, II
Bryan H. Lawrence
John T. McNabb, II
The Report on Executive Compensation shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the following executive officers of the Company were members
of the Compensation Committee and participated in deliberations concerning
executive officer compensation: Charles C. Stephenson, Jr. and Jo Bob Hille.
The other two members of the Compensation Committee during 1997 were the two
outside directors of the Company, Bryan H. Lawrence and John T. McNabb, II.
Mr. Stephenson is a director of Growth Capital Partners, Inc. and GCP
Securities, Inc. Mr. McNabb is an executive officer of these entities.
Dillon Read acted as a Managing Underwriter of the Company's concurrent
public offerings of 3,000,000 shares of Common Stock and $100,000,000 of 8 5/8%
Senior Subordinated Notes Due 2009 of the Company which were consummated on
February 5, 1997, and received certain fees from the Company for its services.
Mr. Lawrence was a Managing Director of Dillon Read at the time of the
offerings.
-15-
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the period
commencing January 1, 1993, and ending on December 31, 1997, with the cumulative
total return on the S&P 500 Index and an index of peer companies (weighted by
market capitalization) selected by the Company. Companies in the peer group are
as follows: Apache Corporation, Barrett Resources Corporation, Cabot Oil & Gas
Corporation, Cross Timbers Oil Company, Devon Energy Corporation, Forest Oil
Corporation, The Louisiana Land and Exploration Corporation (acquired in
November 1997), Noble Affiliates, Inc., Nuevo Energy Company, Oryx Energy
Company, Pioneer Natural Resources Company (formerly Parker & Parsley Petroleum
Company), Pogo Producing Company, Santa Fe Energy Resources, Inc., Seagull
Energy Corporation, Snyder Oil Corporation and United Meridian Corporation. The
comparison assumes $100 was invested on December 31, 1992, in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends.
[PERFORMANCE GRAPH APPEARS HERE]
1992 1993 1994 1995 1996 1997
VINTAGE $100 $145 $136 $182 $280 $310
S&P 500 $100 $110 $112 $153 $189 $252
PEER GROUP $100 $125 $111 $133 $201 $184
The above performance graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
-16-
<PAGE>
CERTAIN TRANSACTIONS
Dillon Read acted as a Managing Underwriter of the Company's concurrent
public offerings of 3,000,000 shares of Common Stock and $100,000,000 of 8 5/8%
Senior Subordinated Notes Due 2009 of the Company which were consummated on
February 5, 1997, and received certain fees from the Company for its services.
Bryan H. Lawrence, a Managing Director of Dillon Read at the time of the
offerings, is a director of the Company.
Since January 1, 1997, certain executive officers of the Company have been
indebted to the Company in amounts in excess of $60,000 under various notes.
The following table sets forth, as to the persons shown, the largest amounts of
their indebtedness outstanding during such period and the interest rates,
maturity dates and the outstanding balances of such indebtedness as of March 25,
1998:
<TABLE>
<CAPTION>
LARGEST RANGE OF OUTSTANDING
AMOUNT OF MATURITY BALANCE AT
NAME INDEBTEDNESS(1)(2) DATES OF NOTES MARCH 25, 1998(1)(2)
- ---- ------------------ ----------------- --------------------
<S> <C> <C> <C>
S. Craig George.......... $ 797,600 7/3/99 to 8/11/99 $ 797,600
William C. Barnes........ 919,746 12/30/98 to 919,746
9/14/99
Robert W. Cox............ 425,934 7/21/99 to 425,934
8/12/99
William L. Abernathy..... 1,167,452 7/9/98 to 1,167,452
10/19/99
William E. Dozier........ 406,766 7/8/98 to 7/27/99 406,766
Michael F. Meimerstorf... 382,179 5/12/99 to 382,179
2/22/2000
Robert E. Phaneuf........ 294,225 8/11/98 294,225
Barry D. Quackenbush..... 229,464 10/9/98 229,464
</TABLE>
____________
(1) This indebtedness was incurred to fund the purchase of shares of Common
Stock upon exercise of options under the Company's Stock Option Plans and
is secured by shares of Common Stock.
(2) This indebtedness bears interest at Mellon Bank, N.A. prime rate.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than 10
percent of the Common Stock, to report their initial ownership of the Common
Stock and any subsequent changes in that ownership to the SEC and the New York
Stock Exchange, and to furnish the Company with a copy of each such report. SEC
regulations impose specific due dates for such reports, and the Company is
required to disclose in this Proxy Statement any failure to file by these dates
during and with respect to fiscal 1997.
-17-
<PAGE>
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during and with respect to fiscal 1997, all Section 16(a)
filing requirements applicable to its officers, directors and more than 10
percent stockholders were complied with, except that Mr. Dozier, Senior Vice
President -Operations of the Company, inadvertently reported late one
transaction.
OTHER MATTERS
MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no matters other than those described in
this Proxy Statement which will be brought before the Annual Meeting for a vote
of the stockholders. If any other matter properly comes before the Annual
Meeting for a stockholder's vote, the persons named in the accompanying proxy
will vote thereon in accordance with their best judgment. The Company's By-laws
require that for business to be properly brought before a meeting of
stockholders by a stockholder, notice must be received by the Secretary of the
Company not less than 45 nor more than 90 days before the meeting. The notice
must contain a brief description of the business proposed to be brought before
the meeting.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Company's 1999
Annual Meeting of Stockholders must be received at the principal executive
offices of the Company, 4200 One Williams Center, Tulsa, Oklahoma 74172, on or
before December 1, 1998, to be considered for inclusion in the Company's proxy
statement and accompanying proxy for that meeting.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS UPON WRITTEN REQUEST TO: WILLIAM C.
BARNES, SECRETARY, VINTAGE PETROLEUM, INC., 4200 ONE WILLIAMS CENTER, TULSA,
OKLAHOMA 74172.
By Order of the Board of Directors,
/s/ WILLIAM C. BARNES
William C. Barnes
Secretary
March 31, 1998
Tulsa, Oklahoma
-18-
<PAGE>
EXHIBIT A
AMENDMENT NUMBER 4
TO
VINTAGE PETROLEUM, INC.
1990 STOCK PLAN
1. Introduction. On June 1, 1990, the Board of Directors of Vintage
------------
Petroleum, Inc. (the "Company") adopted, and the stockholders of the Company
approved, the Vintage Petroleum, Inc. 1990 Stock Plan (as amended, the "Plan").
The Plan permits the granting of awards to key employees (including officers and
directors who are employees) of the Company or its subsidiaries.
The Board of Directors of the Company adopted on February 24, 1994,
and the stockholders of the Company approved on May 10, 1994, Amendment Number 2
to the Plan which increased the total number of shares of common stock of the
Company available for issuance pursuant to awards granted under the Plan from
1,000,000 shares to 1,500,000 shares.
The Board of Directors of the Company adopted on March 15, 1996, and
the stockholders of the Company approved on May 14, 1996, Amendment Number 3 to
the Plan which increased the total number of shares of common stock available
for issuance pursuant to awards granted under the Plan from 1,500,000 shares to
2,250,000 shares.
On October 7, 1997, in accordance with the terms of the Plan, the
total number of shares of common stock available for issuance pursuant to awards
granted under the Plan was adjusted from 2,250,000 shares to 4,500,000 shares to
give effect to the Company's two-for-one common stock split effected on October
7, 1997.
Under the terms of the Plan, a total of 4,500,000 shares of common
stock of the Company are available for issuance pursuant to awards granted under
the Plan. The first sentence of Section 5d of the Plan provides that all
incentive stock options must be granted within 10 years from June 1, 1990 (the
date on which the Plan was adopted and approved by the stockholders of the
Company). By deleting this provision (see Section 3(b) below), the period in
which incentive stock options may be granted under the Plan will be extended
until May 11, 2008.
2. Purpose. The purpose of this Amendment is to (a) increase the total
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number of shares of common stock of the Company available for issuance pursuant
to awards granted under the Plan from 4,500,000 shares to 6,000,000 shares,
which will enable the Company to continue to grant awards under the Plan to
attract and retain key employees of the Company and its subsidiaries, and (b)
extend the date until which incentive stock options may be granted under the
Plan to 10 years from the date on which this Amendment is approved by the
stockholders of the Company and thereby adopted.
3. Amendments. The Plan shall be amended as follows:
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(a) In the last sentence of the first paragraph of Section 4 of the
Plan, the number "4,500,000" is deleted and the number "6,000,000" is
substituted therefor.
(b) The first sentence of Section 5d of the Plan is deleted.
4. No Change. Except as specifically set forth herein, this Amendment
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does not change the terms of the Plan.
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<PAGE>
5. Effective Date. This Amendment shall take effect and be adopted on
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the date that the stockholders of the Company approve this Amendment.
Executed this 11th day of March, 1998.
ATTEST: VINTAGE PETROLEUM, INC.
/s/ William C. Barnes By: /s/ S. Craig George
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William C. Barnes S. Craig George
Secretary President and Chief Executive Officer
Approved by the Board of Directors on March 11, 1998.
A-2
<PAGE>
[LOGO] VINTAGE PETROLEUM, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 12, 1998
The undersigned hereby appoints Charles C. Stephenson, Jr., S. Craig George
and William C. Barnes, and each of them, with full power of substitution, as
proxies to represent and vote all of the shares of Common Stock the undersigned
is entitled to vote at the Annual Meeting of Stockholders of Vintage Petroleum,
Inc. to be held on the 12th day of May, 1998, at 10:00 a.m., local time, in the
Green Room on the 9th Floor, Bank of Oklahoma Tower, One Williams Center, Tulsa,
Oklahoma, and at any and all adjournments thereof, on all matters coming before
said meeting.
PLEASE MARK, SIGN AND DATE THE PROXY ON THE OTHER SIDE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED ON OTHER SIDE)
