<PAGE>
--------------------------------------------------------------------------------
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
(MARK ONE)
<TABLE>
<S> <C>
/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 ___________
</TABLE>
COMMISSION FILE NO. 1-10053
------------------------
ORYX ENERGY COMPANY
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 23-1743284
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
13155 NOEL ROAD 75240-5067
DALLAS, TEXAS
(Address of principal executive (Zip code)
offices)
</TABLE>
Registrant's telephone number, including area code:
(214) 715-4000
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>
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
9 3/4% NOTES DUE SEPTEMBER 15, 1998 NEW YORK STOCK EXCHANGE
10 3/8% DEBENTURES DUE SEPTEMBER 15, 2018 NEW YORK STOCK EXCHANGE
7 1/2% CONVERTIBLE SUBORDINATED
DEBENTURES DUE MAY 15, 2014 NEW YORK STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
MEDIUM TERM NOTES, SERIES A DUE MAY 9, 1995 THROUGH FEBRUARY 1, 2002
9.30% NOTES DUE MAY 1, 1996
10% NOTES DUE JUNE 15, 1999
9 1/2% NOTES DUE NOVEMBER 1, 1999
10% NOTES DUE APRIL 1, 2001
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. / /
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 ____
The aggregate market value of voting stock held by nonaffiliates of the
Registrant as of February 17, 1995, was approximately $1,139 million.
The number of shares of Common Stock, $1 par value, outstanding as of
February 17, 1995, was 99,008,543.
Selected portions of the Oryx Energy Company Annual Report to Shareholders
to the fiscal year ended December 31, 1994 are incorporated by reference in
Parts I, II, and IV of this Form 10-K.
Selected portions of the Oryx Energy Company definitive Proxy Statement,
which will be filed with the Securities and Exchange Commission within 120 days
after December 31, 1994, are incorporated by reference in Part III of this Form
10-K.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
CERTAIN ABBREVIATIONS AND OTHER MATTERS
As used herein and with the Oryx Energy Company Annual Report to
Shareholders for the Fiscal Year Ended December 31, 1994 incorporated by
reference in Parts I, II and IV of this Form 10-K, the following terms have
specific meanings: "m" means thousand, "mm" means million, "bbl" means barrel,
"mb" means thousands of barrels, "mmb" means millions of barrels, "mcf" means
thousand cubic feet, "mmcf" means million cubic feet, "bcf" means billion cubic
feet, "eb" means equivalent barrel, "mmeb" means millions of equivalent barrels,
"b/d" means barrels per day, "mmcf/d" means million cubic feet per day, "WTI"
means West Texas intermediate, "HH" means Henry Hub, "ED&A" means exploration,
development and acquisition and "FD&A" means finding, development and
acquisition.
Natural gas equivalents are determined under the relative energy content
method by using the ratio of 6.0 mcf of natural gas to 1.0 bbl of crude oil,
condensate or natural gas liquids.
With respect to information on the working interest in wells, drilling
locations and acreage, "net" oil and gas wells, drilling locations and acres are
determined by multiplying "gross" oil and gas wells, drilling locations and
acres by Oryx Energy Company's working interest in such wells, drilling
locations or acres.
<PAGE>
PART I
ITEMS 1. AND 2. BUSINESS AND PROPERTIES
GENERAL
Oryx Energy Company (together with its consolidated subsidiaries, unless the
context otherwise requires, Company) engages exclusively in the exploration for
and development of oil and gas. The Company has a strong base of U.S. and
international reserves and exploration and development projects in areas such as
the Gulf of Mexico and the U.K. North Sea. The Company also has producing assets
in Indonesia and Ecuador. The Company's business in the United States is
conducted through Sun Energy Partners, L.P. (Partnership), of which the Company
is the Managing General Partner. At December 31, 1994, the Company had a 98
percent ownership interest in the Partnership.
The Company has begun the implementation of a plan designed to refocus
strategic direction, significantly reduce debt, restore profitability and set
the Company on a course for sustained long-term growth in cash flow. The Company
is reorienting its strategic direction by changing the nature of its capital
spending program. The Company is emphasizing lower-risk and shorter cycle-time
prospects. The U.S. will become the centerpiece of the Company's investment
strategy for the foreseeable future, supplemented by a measured and focused
international program. Capital programs will concentrate spending behind proven
technology. Major development programs will be funded and opportunities around
existing fields will be exploited. Exploration spending will be directed toward
areas of proven success, and overall exploration spending will be decreased. The
Company will emphasize projects that generate near-term cash flow and
de-emphasize entry into new countries or other projects with long cycle times.
The primary geographic focus of both exploration and development spending will
be the Gulf of Mexico. Those projects with strong growth potential will be
funded internally and those which have lower margins or have limited upside will
be sold or otherwise de-emphasized.
For the five years 1990 through 1994, the Company's average production
replacement rate was 152 percent at a cost of $4.62 per eb. In 1994, the Company
replaced 80 percent of its production at $4.76 per eb.
The Company determines its ED&A spending plans primarily based on the cash
flow that it expects to generate. For 1994, the Company spent $314 million for
ED&A programs. The Company plans to spend approximately $340 million for ED&A in
1995, with the primary emphasis being near-term volume additions in the U.S. The
Company is basing its 1995 spending plans on oil and gas spot prices averaging
$18.50 per barrel (WTI) and $1.80 per mmbtu (H H). The Company's actual spending
levels will be governed by its cash flow from operating activities which will
continue to be affected by prevailing oil and gas prices, cost levels and
production volumes. In 1994, about 30 percent of the Company's total ED&A
spending was on exploration and about 70 percent went for development. In 1995,
the Company plans to decrease exploration spending to about 20 percent of total
ED&A outlays and increase development spending to about 80 percent of the total.
In 1994, about 60 percent of total ED&A outlays were made in the U.S. This will
increase to about 68 percent in 1995. By concentrating and highgrading its
exploration and development projects and successfully applying technology, the
Company has been able to substantially reduce its spending levels and achieve
solid reserve replacement rates at competitive costs.
PROVED RESERVES
As of December 31, 1994, the Company's estimated proved reserves were 474
mmbbl of liquids and 1,520 bcf of natural gas which represents an aggregate of
727 mmeb of reserves. The Company's liquids reserves were located in the United
States (47 percent), the United Kingdom (37 percent), Indonesia (8 percent) and
other foreign countries (8 percent). The Company's natural gas reserves were
located in the United States (88 percent) and the United Kingdom (12 percent).
More information on the estimated quantities of proved oil and gas reserves and
information on proved developed oil and gas reserves, as well as information
concerning the Standardized Measure, are presented in the "Consolidated
Financial Statements -- Supplementary Financial and Operating Information" in
the
2
<PAGE>
Company's 1994 Annual Report to Shareholders. The Company files estimates of oil
and gas reserve data with various governmental regulatory authorities and
agencies. The basis of reporting reserves to these authorities and agencies in
some cases may not be comparable. However, the difference in estimates does not
exceed five percent.
OFFSHORE UNITED STATES
The Company has identified the Gulf of Mexico, an area offering proven
potential and well developed infrastructure, as a key part of its strategy.
EXPLORATION
As of December 31, 1994, the Company held 344 thousand net undeveloped acres
offshore, as compared to 388 thousand as of December 31, 1993. The Company owns
interests in about 150 Gulf of Mexico blocks of which 98 are undeveloped. In
1994, the Company spent $4.3 million to acquire interests in 15 blocks.
The Company's offshore exploration program will focus on projects in the
Gulf of Mexico and make extensive use of proven technology. The Company will
focus on projects with rapid cycle times located near existing infrastructure in
water depths less than 1,200 feet.
The Company owns a 100 percent interest in the four-block High Island 384
unit. The High Island 384 unit is composed of blocks 378, 379, 384 and 385 and
is located approximately 112 miles off the Texas coast in water with an average
depth of approximately 360 feet. In 1993, the Company announced an oil discovery
in High Island 379. The HI-A-379 #1 discovery well encountered 179 feet of oil
pay from three Pleistocene sands between 4,600 and 5,130 feet. In the early part
of 1994, the Company announced an oil and gas discovery in High Island 385. The
High Island 385 discovery encountered 80 feet of net pay in two Basal Nebraskan
sands between 14,300 and 14,410 feet. The combined production from the two
discoveries is expected to peak at approximately 20 meb per day. This new
development, which has been named the Patton Project, began production in
January 1995.
The Company also owns a 100 percent interest in the High Island A-576 block.
The HI A-576 #1 discovery well encountered 168 feet of net pay from the Lower
Pleistocene sands. The well is located 110 miles off the Texas coast in 290 feet
of water and is 20 miles southwest of the Company's recent discoveries at High
Island 379 and 385. This development, which has been named the Sherman Project,
is expected to begin production in early 1996 with peak production of about 6 to
9 meb per day. An appraisal well was drilling at December 31, 1994.
As of December 31, 1994, no exploratory wells were being drilled. The
Company drilled 4 gross (3 net) exploratory wells offshore in 1994 and 7 gross
(4 net) in 1993. Of the wells drilled in 1994, 1 gross (1 net) well was
successful.
PRODUCTION AND DEVELOPMENT
Average daily production of crude oil and condensate offshore was 9.7, 8.6
and 7.2 mbbls in 1994, 1993 and 1992. Average daily production of natural gas
offshore was 203, 193 and 181 mmcf in 1994, 1993 and 1992.
In the first quarter of 1994, the Company announced the results of an
appraisal well on Garden Banks 260 Block. This was the third successful well on
the block. The well encountered three zones containing hydrocarbons with a total
of 183 feet of pay. This development, which has been named the Baldpate Project,
is in federal waters offshore Texas in water depths of approximately 1,700 feet.
The Company expects to begin production in 1998 with gross peak production of
about 40 meb per day. The Company owns a 50 percent interest in a three-block
area.
The Company recently announced plans for the development of Viosca Knoll 826
which lies 80 miles off the Alabama coast in water depths of 1,500 to 2,500
feet. This development has been named the Neptune Project. First production is
anticipated in 1997 with a gross peak rate of 24 to 30 meb per day. The Company
operates the four-block Viosca Knoll unit and owns a 50 percent interest. The
project will utilize a new type of floating production facility called a spar
which is on the
3
<PAGE>
leading edge of today's technology. The spar is a cylindrical-shaped vessel
which floats in a vertical position, similar to a buoy. Production risers will
be routed through the cylinder to allow the spar to float around them. The field
will be developed in multiple phases with the spar being moved from location to
location. In the third quarter of 1994, the Company exchanged its interest in an
undeveloped block in the Gulf of Mexico for a royalty interest in Viosca Knoll
826.
As of December 31, 1994, the Company was drilling 8 gross and 5 net
development wells. The Company drilled 16 gross (6 net) development wells
offshore in 1994 and 16 gross (8 net) in 1993. Of the 16 gross (6 net)
development wells drilled in 1994, 14 gross (5 net) were successful.
ONSHORE UNITED STATES
The onshore area continues to be a major contributor of production volumes
and cash flow. The Company is applying 3-D technology in and around mature
fields creating opportunities in new fault blocks and deeper pool horizons which
provide primarily new gas volumes. To optimize crude oil volumes and cash flow,
the Company will continue to exploit its waterflood operations. Assets are
regularly subjected to performance reviews and divestments will continue to be
made to upgrade the overall portfolio. The U.S. onshore will be managed for
maximum cash flow generation.
EXPLORATION
The Company drilled 1 gross exploratory well onshore in 1994 which was
successful. At December 31, 1994, no exploratory wells were being drilled.
PRODUCTION AND DEVELOPMENT
Average daily production of crude oil and condensate onshore was 38.2, 47.3
and 56.2 mb in 1994, 1993 and 1992. The decrease in 1994 crude oil and
condensate production compared to 1993 and in 1993 compared to 1992 was due
primarily to asset sales and normal declines. Average daily net production of
natural gas onshore was 335, 330 and 403 mmcf in 1994, 1993 and 1992. The
decrease in 1993 natural gas production compared to 1992 was due primarily to
divestments.
As of December 31, 1994, the Company was drilling or participating in the
drilling of 33 gross and 19 net development wells onshore. Of the 80 gross (38
net) development wells drilled onshore during 1994, 76 gross (34 net) were
successful.
As part of its asset sale program, the Company sold substantially all its
gas processing plant business in 1992. The Company's remaining gas plant
business at December 31, 1994 consisted of 11 operated gas processing plants and
interests in 4 others.
UNITED KINGDOM
The Company has nine producing fields, two development projects and several
exploration prospects in the North Sea. Reserves have grown considerably since
the Company acquired its interests in these fields in 1990. After producing 77
mmeb over the past four years, the Company's reserves are estimated to 205 mmeb
as of December 31, 1994.
EXPLORATION
The Company held 266 thousand net undeveloped acres in the North Sea as of
December 31, 1994, compared to 259 thousand net undeveloped acres as of December
31, 1993.
In 1994, the Company drilled one gross exploratory well in the North Sea,
which was not successful. At December 31, 1994, no exploratory wells were
drilling.
PRODUCTION AND DEVELOPMENT
The Company's producing fields set forth in the table below, are located in
the northern and central sectors of the North Sea with the exception of the
Audrey and Galleon fields, which are located in the southern gas basin.
4
<PAGE>
As of December 31, 1994, the Company was drilling or participating in the
drilling of 3 gross and 1 net development wells in the North Sea. All of the 22
gross (4 net) development wells drilled in the U.K. in 1994 were successful.
The Company's average daily net production of crude oil and condensate in
the United Kingdom was 54.4, 35.2 and 35.4 mb during 1994, 1993 and 1992. The
increase in production in 1994 was due to the acquisition of additional interest
in Ninian, the exchange for additional interests in Hutton, Lyell and Murchison
and the results of development drilling. Average daily production of natural gas
was 62, 80 and 95 mmcf during 1994, 1993 and 1992. The decrease in net daily
production of natural gas in 1994 compared to 1993 was due to reduced takes by
British Gas.
The following table sets forth the North Sea producing fields and their net
daily production:
<TABLE>
<CAPTION>
1994 NET
DAILY
PERCENT PRODUCTION
PRODUCING FIELDS OIL/GAS OWNERSHIP (MEB)
------------------------------------------------- --------- ------------ -------------
<S> <C> <C> <C>
Alba............................................. Oil 15.5 6.4
Audrey........................................... Gas 33.6 9.1
Dunlin........................................... Oil 14.4 5.6
Galleon.......................................... Gas 10.0* .4
Hutton........................................... Oil 44.3 7.4
Murchison........................................ Oil 51.8 6.4
Ninian........................................... Oil 29.5 19.6
Lyell............................................ Oil 66.6 7.4
Strathspey....................................... Oil/Gas 6.5 2.4
---
Total........................................ 64.7
---
---
<FN>
------------------------
* Estimated; subject to unitization
</TABLE>
In December 1993, the Company increased its interest in Ninian to 29.5
percent by acquiring an additional 8.2 percent interest in the Ninian field and
related facilities. The Company's net production from the Ninian field increased
from approximately 15 mb per day to approximately 20 mb per day. The Company
also receives tariff income on production from several satellite fields that
produce through the Ninian facilities.
In 1993, the Company began production on two North Sea development projects.
Lyell, a subsea satellite facility, began producing in 1993 and peaked at 10 mb
of oil per day, net. The Company has a 66.6 percent working interest in the
Lyell field. The second subsea satellite facility, Strathspey, began production
in the last week of 1993. The Company has a 6.5 percent working interest in the
Strathspey field. Production from Lyell and Strathspey is transported to the
Ninian platforms.
In early 1994, the Company began producing oil from its Alba field. Alba is
located on Block 16/26 in the central sector of the North Sea. Production from
the field is pumped to a floating storage unit three kilometers away, from which
point it is transported to shore using a dedicated shuttle tanker. The Company
owns a 15.5 percent interest in the field.
In the third quarter of 1994, the Company exchanged its interest in the
undeveloped Britannia field for additional interests in the Hutton, Lyell and
Murchison producing fields and $40.4 million in cash. This transaction increased
near-term production volumes and considerably reduced future development capital
expenditures. Effective January 9, 1995, the Company took over operatorship of
the Hutton, Lyell and Murchison fields. In late 1994, the Company completed a
development well for 20mb gross per day in a newly discovered extension to the
Hutton field. The well encountered in excess of 150 feet of net pay in the Brent
sandstone.
5
<PAGE>
In the fourth quarter of 1994, the Company began producing gas from its
Galleon field at a net of 19 mmcf per day. Galleon is located in the southern
portion of the North Sea. Unmanned production facilities are remotely controlled
from onshore. The Company has a 10 percent interest in the field, subject to
unitization.
The Company also has two North Sea developments where discoveries have been
made and confirmation wells drilled. They are located in the northern sector
(Columba) and in the central sector (Alba Phase II). In total, the Company has
34 blocks in the North Sea. The following table outlines the North Sea
prospective developments, with their expected start-up dates and estimated daily
net peak production:
<TABLE>
<CAPTION>
DAILY NET PEAK
YEAR OF PERCENT PRODUCTION
DEVELOPMENT PROJECTS OIL/GAS START-UP OWNERSHIP (MEB)
--------------------------------------- ----------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Columba................................ Oil 1995 28 2
Alba Phase II.......................... Oil 1998 15.5 6-7
</TABLE>
In addition, the Company has interests in and receives tariff income from
North Sea transportation systems, terminal storage facilities and certain other
related income producing assets, including the Brent and Ninian Pipeline Systems
and the Sullom Voe Terminal in the Shetland Islands.
INDONESIA
The Company acquired interests in three production sharing contracts in
Indonesia in 1990 as part of the international properties acquisition. Since
that time, it has successfully participated in the development of the Intan,
Widuri and KF fields within their contract areas.
EXPLORATION
As of December 31, 1994 and 1993, the Company held 1,126 thousand net
undeveloped acres in Indonesia.
The Company drilled 11 gross (2 net) exploratory wells, of which 4 gross (1
net) were successful in 1994. As of December 31, 1994, no exploratory wells were
being drilled.
PRODUCTION AND DEVELOPMENT
The Company's average daily net production of crude oil and condensate in
Indonesia was 13.5, 15.0 and 18.0 mb during 1994, 1993 and 1992. The decrease in
net daily production during 1994 as compared to 1993 was due to normal declines
from mature fields.
The following table sets forth Indonesian producing areas and their net
daily production:
<TABLE>
<CAPTION>
1994 NET
DAILY
PERCENT PRODUCTION
CONTRACT AREA OWNERSHIP (MEB)
-------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Malacca Strait................................................ 21.5 5.7
Kakap......................................................... 18.8 2.3
Southeast Sumatra............................................. 3.7 5.5
---
Total..................................................... 13.5
---
---
</TABLE>
The Company has made a platform decision on the KRA-KG fields which are
within the Kakap contract area. Development drilling commenced in 1994. The
fields will be tied into existing production facilities. Production is expected
to begin in early 1995 with gross peak daily production of 63 mb per day.
As of December 31, 1994, the Company was in the process of drilling or
participating in the drilling of 11 gross (1 net) development wells in
Indonesia. All of the 21 gross (1 net) development wells drilled in 1994 were
successful.
6
<PAGE>
OTHER FOREIGN
In 1994, the Company had producing interests in Ecuador and Gabon. In
Ecuador, the Gacela field began producing in 1993 and a decision to proceed with
development of the Jaguar field has been made. The Company plans to conduct
geophysical work on its recently acquired Block 21 in Ecuador.
During 1994, the Company signed two oil and gas agreements with the Republic
of Kazakhstan. The agreements involve both the development of a known field as
well as the rights to explore a large block in western Kazakhstan. A joint
venture agreement was signed for development of the Arman Field which was
discovered in the 1980's but has not yet been developed. The Company will
jointly operate the venture and currently holds a 50 percent interest, while the
remaining interests will be held by two Kazakhstani partners. The Arman Field is
located in the north Buzachi Peninsula. In addition, a production sharing
agreement was signed for approximately 3 million acres located east of the Arman
Field. The Company will operate and currently owns a 100 percent interest in
this exploration venture.
EXPLORATION
As of December 31, 1994, the Company held 4,623 thousand net undeveloped
acres in other foreign properties, as compared to 1,848 thousand net undeveloped
acres as of December 31, 1993. The increase of 2,775 thousand net undeveloped
acres in 1994 as compared to 1993 is due to the production sharing agreement
obtained by the Company in Kazakhstan.
The Company drilled 7 gross (2 net) unsuccessful exploratory wells in 1994
in Algeria, Australia and the Zone of Cooperation between Australia and
Indonesia. At December 31, 1994, the Company was drilling or participating in
the drilling of 1 gross exploratory well in the Zone of Cooperation.
PRODUCTION AND DEVELOPMENT
The Company's average daily net production of crude oil and condensate from
other foreign areas was 5.3, 3.7 and 2.4 mb in 1994, 1993 and 1992. The average
daily production of crude oil and condensate increased in 1994, compared to
1993, due to the increased production in Ecuador. In 1994, the Company had a
14.25 percent working interest in the Oguendjo Production Sharing Contract in
Gabon.
The Company drilled 14 gross (3 net) development wells, all of which were
successful in 1994. As of December 31, 1994, the Company was in the process of
drilling or participating in the drilling of 1 gross development well.
PRODUCTION
In 1994, the Company's production was concentrated primarily in the United
States, the United Kingdom and Indonesia. In 1994, the Company produced 50.2
mmeb from its properties in the United States, 23.6 mmeb from its properties in
the United Kingdom, 4.9 mmeb from its properties in Indonesia and 2 mmeb from
its other foreign properties.
7
<PAGE>
The following table sets forth the Company's average daily net production
for 1994, 1993 and 1992:
AVERAGE DAILY NET PRODUCTION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Crude & Condensate:
(Thousands of barrels daily)
United States
Onshore.......................................................... 38.2 47.3 56.2
Offshore......................................................... 9.7 8.6 7.2
--------- --------- ---------
47.9 55.9 63.4
--------- --------- ---------
U.K................................................................ 54.4 35.2 35.4
Indonesia.......................................................... 13.5 15.0 18.0
Other foreign...................................................... 5.3 3.7 2.4
--------- --------- ---------
73.2 53.9 55.8
--------- --------- ---------
Processed Natural Gas Liquids:*
(Thousands of barrels daily)
United States...................................................... 6.4 7.4 19.7
--------- --------- ---------
127.5 117.2 138.9
--------- --------- ---------
--------- --------- ---------
Natural Gas:**
(Millions of cubic feet daily)
United States
Onshore.......................................................... 335 330 403
Offshore......................................................... 203 193 181
--------- --------- ---------
538 523 584
U.K................................................................ 62 80 95
--------- --------- ---------
600 603 679
--------- --------- ---------
--------- --------- ---------
<FN>
------------------------
*The Company sold substantially all of its United States gas plant business
during 1992. (See Note 3 to the Consolidated Financial Statements in the
Company's 1994 Annual Report to Shareholders.)
**Natural gas production includes unprocessed natural gas liquids.
</TABLE>
8
<PAGE>
ACREAGE, WELLS AND PER UNIT DATA
The following table sets forth the Company's undeveloped and developed oil
and gas acreage (in thousands) held at December 31, 1994 and 1993:
UNDEVELOPED ACREAGE
<TABLE>
<CAPTION>
GROSS NET
-------------------- --------------------
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
United States
Onshore................................................ 1,142 997 572 433
Offshore............................................... 511 674 344 388
--------- --------- --------- ---------
1,653 1,671 916 821
U.K...................................................... 816 889 266 259
Indonesia................................................ 2,866 2,866 1,126 1,126
Other Foreign............................................ 8,903 6,783 4,623 1,848
--------- --------- --------- ---------
14,238 12,209 6,931 4,054
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
DEVELOPED ACREAGE
<TABLE>
<CAPTION>
GROSS NET
-------------------- --------------------
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
United States
Onshore................................................... 1,137 1,599 631 870
Offshore.................................................. 244 253 97 104
--------- --------- --------- ---------
1,381 1,852 728 974
U.K......................................................... 101 174 47 67
Indonesia................................................... 6,061 6,426 806 819
Other Foreign............................................... 52 98 25 80
--------- --------- --------- ---------
7,595 8,550 1,606 1,940
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
9
<PAGE>
The following table sets forth the Company's net exploratory and development
oil and gas wells drilled during 1994, 1993 and 1992:
EXPLORATORY WELLS DRILLED
<TABLE>
<CAPTION>
GROSS NET
------------------------------- -------------------------------
1994 1993 1992 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Oil
United States
Onshore...................................... -- -- 3 -- -- 1
Offshore..................................... -- 2 1 -- 1 1
--- --- --- --- --- ---
-- 2 4 -- 1 2
U.K............................................ -- -- 1 -- -- --
Indonesia...................................... 3 -- 6 -- -- 1
Other foreign.................................. -- 2 1 -- 1 1
Gas
United States
Onshore...................................... 1 -- 2 -- -- 1
Offshore..................................... 1 1 3 1 1 3
--- --- --- --- --- ---
2 1 5 1 1 4
U.K............................................ -- -- 1 -- -- --
Indonesia...................................... 1 -- -- 1 -- --
Dry
United States
Onshore...................................... -- 2 6 -- 2 3
Offshore..................................... 3 4 1 2 2 --
--- --- --- --- --- ---
3 6 7 2 4 3
U.K............................................ 1 3 3 -- 1 1
Indonesia...................................... 7 9 7 1 1 1
Other foreign.................................. 7 2 1 2 1 --
--- --- --- --- --- ---
Total...................................... 24 25 36 7 10 13
--- --- --- --- --- ---
--- --- --- --- --- ---
</TABLE>
10
<PAGE>
DEVELOPMENT WELLS DRILLED
<TABLE>
<CAPTION>
GROSS NET
------------------------------- -------------------------------
1994 1993 1992 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Oil
United States
Onshore...................................... 27 44 69 11 29 43
Offshore..................................... 5 4 -- 2 2 --
--- --- --- --- --- ---
32 48 69 13 31 43
U.K............................................ 20 5 2 4 1 --
Indonesia...................................... 21 29 26 1 3 3
Other foreign.................................. 14 7 2 3 2 1
Gas
United States
Onshore...................................... 49 38 26 23 15 11
Offshore..................................... 9 8 7 3 3 2
--- --- --- --- --- ---
58 46 33 26 18 13
U.K............................................ 2 -- -- -- -- --
Dry
United States
Onshore...................................... 4 1 4 4 1 3
Offshore..................................... 2 4 -- 1 3 --
--- --- --- --- --- ---
6 5 4 5 4 3
U.K............................................ -- 6 -- -- 1 --
Indonesia...................................... -- 1 6 -- -- 1
Other foreign.................................. -- 1 -- -- -- --
--- --- --- --- --- ---
Total........................................ 153 148 142 52 60 64
--- --- --- --- --- ---
--- --- --- --- --- ---
</TABLE>
The following table sets forth the Company's gross and net producing oil and
gas wells at December 31, 1994:
PRODUCING OIL AND GAS WELLS
<TABLE>
<CAPTION>
GROSS* NET
-------------------- --------------------
OIL GAS OIL GAS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
United States
Onshore..................................................... 3,603 897 1,965 540
Offshore.................................................... 66 177 24 70
--------- --------- --------- ---
3,669 1,074 1,989 610
Foreign:
U.K......................................................... 157 20 52 6
Indonesia................................................... 409 -- 35 --
Other foreign............................................... 49 -- 11 --
--------- --------- --------- ---
Total..................................................... 4,284 1,094 2,087 616
--------- --------- --------- ---
--------- --------- --------- ---
<FN>
------------------------
*Gross producing wells include 197 multiple completion wells (more than one
formation producing into the same well bore).
</TABLE>
11
<PAGE>
The following table sets forth the Company's average revenues and production
costs per unit of oil and gas production for 1994, 1993 and 1992:
AVERAGE PER UNIT REVENUES AND PRODUCTION COSTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Crude and condensate (per bbl)
U.S.................................................................. $ 14.69 $ 15.96 $ 18.51
U.K.................................................................. $ 15.44 $ 15.82 $ 19.14
Indonesia............................................................ $ 16.05 $ 17.76 $ 19.21
Other foreign........................................................ $ 14.89 $ 16.91 $ 16.95
Worldwide............................................................ $ 15.06 $ 16.08 $ 18.77
Crude, condensate and natural gas liquids (per bbl)
U.S.................................................................. $ 13.44 $ 14.08 $ 18.21
Natural Gas (per mcf)
U.S.................................................................. $ 1.87 $ 1.96 $ 1.72
U.K.................................................................. $ 2.15 $ 2.11 $ 2.50
Worldwide............................................................ $ 1.90 $ 1.98 $ 1.83
Average production cost per unit of oil and gas production (per eb):*
U.S.................................................................. $ 4.55 $ 4.57 $ 4.20
U.K.................................................................. $ 7.25 $ 7.67 $ 8.88
Indonesia............................................................ $ 12.00 $ 12.97 $ 12.37
Other foreign........................................................ $ 5.50 $ 7.19 $ 8.10
Worldwide............................................................ $ 5.79 $ 5.95 $ 6.28
<FN>
------------------------
*Average production cost consists of operating cost and production taxes.
</TABLE>
ASSET DISPOSITIONS
Assets are managed on a portfolio basis. The Company will continue to buy
and sell assets with the intention of upgrading its asset base. Asset sales of
$300 million are anticipated in 1995.
RECOVERY METHODS
During 1994, the Company obtained 55, 38 and 7 percent of its U.S. crude
production from primary, secondary and tertiary recovery methods. This compares
to 49, 39 and 12 percent of its crude oil production in 1993. At December 31,
1994, the Company operated or participated in 3 major tertiary oil recovery
programs that produced approximately 4 thousand net barrels of crude and
condensate daily.
The terms "secondary recovery" and "tertiary recovery" relate to those
methods used to increase the quantity of crude oil and condensate and natural
gas that can be recovered in excess of the quantity recoverable using the
primary energy found in a reservoir. Secondary recovery methods include pressure
maintenance by waterflooding or natural gas injection. Tertiary recovery methods
include injection of carbon dioxide, nitrogen, chemicals, steam or a combination
of these with natural gas or water. Tertiary and, to a lesser extent, secondary
recovery operations generally have higher operating costs compared to those
incurred in primary production efforts.
MARKETING OF OIL AND GAS
DISTRIBUTION
In the U.S., crude oil, condensate and natural gas are distributed through
pipelines and/or trucks to traders, end users, gatherers and transportation
companies and in foreign locations by tankers and/
12
<PAGE>
or pipelines to traders and end users. Worldwide, sufficient distribution
systems exist and are readily available in the areas of the Company's production
to enable the Company to effectively market its oil and gas, except in
Kazakhstan, where the Company currently has no production. In some instances,
the Company owns an interest in these systems.
CRUDE AND CONDENSATE
During 1994, sales to J. Aron & Company totaled approximately 18 percent of
the Company's sales of crude oil and condensate. No other customer purchased
more than 10 percent of the Company's sales of crude oil and condensate.
Since most of the Company's crude and condensate is produced in areas where
there are other buyers offering to purchase at market prices, the Company
believes that the loss of any major purchaser would not have a material adverse
effect on the Company's business. In 1994, the ten largest customers, including
J. Aron & Company accounted for approximately 49 percent of such sales.
Currently, approximately 53 percent of domestic sales are made pursuant to
arrangements that are cancelable upon 30 days' written notice by the Company or
the purchaser, with substantially all of the remainder of the domestic
production being sold pursuant to contracts of varying terms of up to ten years
in length.
The Company markets its foreign crude oil production, which is sold under
short-term contracts, on a cargo lot basis.
NATURAL GAS
The Company's natural gas marketing strategies in the U.S. are designed to
be effective in the current competitive environment. Sales of natural gas into
short-term markets averaged 56 percent of total sales. At year-end over 50
percent of total sales were contracted to end-users of natural gas on a long
term basis. The Company's strategy is to sell to end-users that possess firm
transportation rights from the producing basin to the city gate on major
interstate pipelines. Contract length of these term sales ranges from one to ten
years.
The Company sells its natural gas production from the North Sea under
long-term agreements with British Gas plc, which represented 12 percent of the
Company's natural gas sales for 1994.
During 1994, British Gas plc was the only customer who accounted for more
than 6 percent of the Company's natural gas sales. The ten largest customers
accounted for approximately 22 percent of total gas sales during 1994.
HEDGING
Because of the volatility of oil and gas prices, the Company periodically
enters into crude oil and natural gas hedging activities.
REGULATION
GENERAL
The oil and gas industry is subject to regulation by the public policies of
national, state and local governments relating to such matters as the award of
exploration and production interests, the imposition of specific drilling
obligations, environmental protection controls, control over the development and
abandonment of a field (including restrictions on production and abandonment of
production facilities) and, in some cases, possible nationalization,
expropriation, regulatory taking, cancellation or frustration of contract
rights. The industry is also subject to the payment of royalties and taxes,
which tend to be high compared to those levied on other commercial activities.
The Company cannot predict the impact of future regulatory and taxation
initiatives.
NATURAL GAS
The natural gas industry in the United States remains under federal
regulation pursuant to the Natural Gas Act and the Natural Gas Policy Act.
However, as a result of the Natural Gas Decontrol Act, wellhead regulation of
gas prices ended January 1, 1993.
13
<PAGE>
ENVIRONMENTAL MATTERS
The Company is subject to, and makes every effort to comply with, various
environmental quality control regulations of national, state and local
governments. Although environmental requirements can have a substantial impact
upon the energy industry, generally these requirements do not appear to affect
the Company any differently or to any greater or lesser extent than other
exploration and production companies.
The Company has been named as a potentially responsible party (PRP) at four
sites pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended. At two of these sites, the Company has been
named as a de minimis party and therefore expects its liability to be small. At
a third site, the Company is reviewing its options and anticipates that it will
participate in steering committee activities with the Environmental Protection
Agency (EPA). At the fourth and largest site, the Operating Industries, Inc.
site in California, the Company has participated in a steering committee
consisting of 139 companies. The steering committee and other PRP's previously
entered into two partial consent decrees with the EPA providing for remedial
actions which have been or are to be completed. The steering committee has
successfully negotiated a third partial consent decree which provides for the
following remedial actions: a clay cover, methane capturing wells, and leachate
destruction facilities. The remaining work at the site involves groundwater
evaluation and long-term operation and maintenance.
Based on the facts outlined above and the Company's ongoing analyses of the
actions where it has been identified as a PRP, the Company believes that it has
accrued sufficient reserves to absorb the ultimate cost of such actions and that
such costs therefore will not have a material impact on the Company's liquidity,
capital resources or financial condition. While liability at superfund sites is
typically joint and several, the Company has no reason to believe that defaults
by other PRPs will result in liability of the Company materially larger than
expected.
COMPETITION
The oil and gas industry is highly competitive. Integrated companies,
independent companies and individual producers and operators are active bidders
for desirable oil and gas properties, as well as for the equipment and labor
required to operate and develop such properties. Although several of these
competitors have financial resources substantially greater than those of the
Company, management believes that the Company is in a position to compete
effectively.
The availability of a ready market for the Company's oil and gas production
depends on numerous factors beyond its control, including the level of prices
and consumer demand, the extent of worldwide oil and gas production, the cost
and availability of alternative fuels, the cost and proximity of pipelines and
other transportation facilities, regulation by national and local authorities
and the cost of compliance with applicable environmental regulations.
TECHNOLOGY
The Company's exploration, development and production activities depend upon
the use of applied technology. In support of this, the Company has 29 engineers,
geoscientists, technicians and support personnel focusing on the technology used
in the exploration for, and development and production of, energy resources. The
Company's expenditures on technology activities, including employee-related
costs, were $11 million, $15 million and $15 million for the years 1994, 1993
and 1992, respectively.
THE PARTNERSHIP
Since December 1, 1985, the Company has functioned as the managing general
partner for, and has conducted its business operations in the United States
principally through the Partnership, a Delaware limited partnership. As of
December 31, 1994, the Company had a 98 percent interest in the Partnership. The
remaining two percent partnership interest is a limited partnership interest and
is held by public unitholders in the form of depositary units. There were
7,543,100 depositary units outstanding at December 31, 1994.
14
<PAGE>
The Partnership operates through Sun Operating Limited Partnership, which is
a Delaware limited partnership, and several other operating partnerships.
Certain conflicts of interest may arise as a result of the relationships
between the Company and the Partnership. The directors and officers of the
Company have fiduciary duties to manage the Company in the best interest of its
stockholders. The Company, as managing general partner of the Partnership, has a
fiduciary duty to manage the Partnership in a manner that is fair to the public
unitholders. The duty of the directors of the Company to its stockholders may
therefore come into conflict with the duties of the Company to the public
unitholders. The Partnership may sell limited partnership units to the Company
for the purpose of funding the Partnership's property acquisition, exploration
and development cash requirements.
The Audit Committee of the Board of Directors of the Company (Audit
Committee), none of whose members is affiliated with the Company except as
Company directors or stockholders or as holders of units, reviews policies and
procedures developed by the Company for dealing with various matters as to which
a conflict of interest may arise. The Audit Committee also monitors the
application of such policies and procedures.
EMPLOYEES
At December 31, 1994, the number of full-time active employees of the
Company was approximately 1,200.
ITEM 3. LEGAL PROCEEDINGS
Three federal securities actions were brought against the Company and
certain of its senior officers in the United States District Court for the
Northern District of Texas in 1992. These actions, now consolidated, purport to
be brought on behalf of a class of open market purchasers of the Common Stock
during the period October 3, 1991, through June 4, 1992. The plaintiffs allege
that the Company made false and misleading statements about its financial
prospects and, in particular, about its intentions to continue paying dividends
at the same level as in the past. Plaintiffs claim violations of Section 10(b)
of the Securities Exchange Act of 1934 and related provisions. The consolidated
complaint seeks damages for alleged market losses in an unquantified amount.
Management believes that the claims have no merit and will defend against them
vigorously.
The Company is involved in a number of legal and administrative proceedings
arising in the ordinary course of its oil and gas business. Although the
ultimate outcome of these proceedings cannot be ascertained at this time, it is
reasonably possible that some of the proceedings could be resolved unfavorably
to the Company. Management of the Company believes that any liabilities which
may arise would not be material in relation to its financial position at
December 31, 1994. The Company intends to maintain liability and other insurance
of the type customary in the oil and gas business with such coverage limits as
the Company deems prudent.
15
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
On May 5, 1994, the Annual Meeting of Shareholders of Oryx Energy Company
was held to vote on proposals as follows:
(a) To elect three directors to Class III of the Company's Board of
Directors.
<TABLE>
<CAPTION>
WILLIAM E. CAROL E. ROBERT P.
BRADFORD DINKINS HAUPTFUHRER
------------------ --------------- --------------------
<S> <C> <C> <C>
Affirmative................................ 71,427,263 71,325,759 68,203,684
Negative...................................
Abstained..................................
Withheld................................... 3,885,449 3,986,953 7,109,028
Broker non-votes...........................
Shares without executed proxies and not
present for vote.......................... 21,633,357 21,633,357 21,633,357
------------------ --------------- -----------
Shares entitled to vote.................... 96,946,069 96,946,069 96,946,069
------------------ --------------- -----------
------------------ --------------- -----------
</TABLE>
(b) To approve the appointment of Coopers & Lybrand L.L.P. as
independent accountants for the fiscal year 1994.
<TABLE>
<S> <C>
Affirmative............................................................ 72,790,550
Negative............................................................... 1,845,258
Abstained.............................................................. 676,904
Withheld...............................................................
Broker non-votes.......................................................
Shares without executed proxies and not present for vote............... 21,633,357
----------
Shares entitled to vote................................................ 96,946,069
----------
----------
</TABLE>
EXECUTIVE OFFICERS
The following table sets forth information as to the Company's executive
officers. All officers of the Company hold their offices at the pleasure of the
Board of Directors.
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE
POSITION WITH THE COMPANY DURING PAST FIVE YEARS
--------------------------------------------------- ------------------------------------------------------------
<S> <C>
Jerry W. Box, 56 .................................. Mr. Box has been in this position since December 1, 1994.
Executive Vice President, Exploration From January 1992 through November 1994, he was Senior Vice
and Production, and Director President, Exploration and Production of the Company. From
1987 to 1991, he was Vice President, Exploration.
David F. Chavenson, 42 ............................ Mr. Chavenson assumed this position in October 1993. For the
Treasurer five years previous thereto, he was Assistant Treasurer and
Manager, Corporate Finance and Credit of the Company.
Sherri T. Durst, 45 ............................... Ms. Durst assumed this position in December 1993. From
General Auditor February 1990 to December 1993, she served as Manager,
Financial Processes. For the six years previous thereto,
she held the position of Financial Systems Project Manager.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE
POSITION WITH THE COMPANY DURING PAST FIVE YEARS
--------------------------------------------------- ------------------------------------------------------------
<S> <C>
Robert L. Keiser, 52 .............................. Mr. Keiser assumed this position on December 1, 1994. From
Chairman of the Board, Chief January 1992 through November 1994, he was President and
Executive Officer, and President Chief Operating Officer of the Company. From January 1990
through December 1991, he was President and Chief Executive
Officer of Oryx U.K. Energy Company. He was also Vice
President, International Exploration and Production for the
Company from January 1990 until August 1990 and from April
1991 through December 1991. From July 1987 to December
1989, he was Vice President, Planning and Development of
the Company.
William C. Lemmer, 50 ............................. Mr. Lemmer assumed this position on February 2, 1995. From
Vice President, General Counsel June 1994 until February 1995, he served as Vice President
and Secretary and General Counsel to the Company. For the five previous
years, he was Chief Counsel to the Company.
Edward W. Moneypenny, 53 .......................... Mr. Moneypenny has been in this position since December 1,
Executive Vice President, Finance, 1994. From January 1992 through November 1994, he was
Chief Financial Officer, and Director Senior Vice President, Finance and Chief Financial Officer
of the Company. From 1988 to 1991, he was Vice President,
Finance and Chief Financial Officer of the Company.
William P. Stokes, Jr., 53 ........................ Mr. Stokes assumed this position on February 2, 1995. From
Vice President, Marketing January 1993 until February 1995, he was Vice President,
Corporate Development and Human Relations. From January
1990 until January 1993, he served the Company as Vice
President, Planning and Development. For the five years
previous thereto, Mr. Stokes held the position of Manager
Western Production Region of the Company.
Robert L. Thompson, 48 ............................ Mr. Thompson assumed this position on February 2, 1995. From
Comptroller and Corporate February 1993 through January 1995, he served the Company
Planning Director as Director of Business Planning and Acquisitions. From
January 1992 through January 1993, he was Director of
Planning and Analysis and for the three previous years he
was Director of Financial Analysis.
</TABLE>
17
<PAGE>
PART II
ITEM 5. MARKET FOR ORYX ENERGY COMPANY COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Market for Oryx Energy Company Common Stock and Related Security Holder
Matters on page 48 of the Company's 1994 Annual Report to Shareholders is
incorporated herein by reference. The market exchange on which the Company's
stock is traded is listed on the cover page of this Form 10-K Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
page 17 of the Company's 1994 Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by this item is incorporated herein by reference to
pages 12-16 of the Company's 1994 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information in the Company's 1994 Annual Report to
Shareholders is incorporated herein by reference: the Consolidated Financial
Statements on pages 18-21; the Notes to Consolidated Financial Statements on
pages 22-40; the Report of Independent Accountants on page 41; and the
Supplementary Financial and Operating Information (Unaudited) on pages 42-46.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information on directors required by this Item is incorporated herein by
reference to the section entitled "Election of Directors" on pages 3-6 of the
Company's definitive Proxy Statement dated March 22, 1995.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to
the section entitled "Executive Compensation" on pages 9-11 of the Company's
definitive Proxy Statement dated March 22, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to
sections entitled "Security Ownership of Certain Beneficial Owners" on pages 2-3
and "Security Ownership of Management" on page 8 of the Company's definitive
Proxy Statement dated March 22, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to
the section entitled "Certain Transactions and Relationships" on page 16 of the
Company's definitive Proxy Statement dated March 22, 1995.
18
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Consolidated Financial Statements: The information in the Company's
1994 Annual Report to Shareholders as described in Item 8 is incorporated
herein by reference.
Other schedules and separate financial statements of unconsolidated
subsidiaries are omitted because the information is shown elsewhere in this
report, is not required or is not applicable.
2. Exhibits:
<TABLE>
<C> <S> <C>
*3.1 -- Restated Certificate of Incorporation of the Registrant, as
currently in effect
**3.2 -- Amended and Restated Bylaws of the Registrant, as currently in
effect
***4.1 -- Form of Common Stock of the Registrant
****4.2 -- Rights Agreement dated as of September 11, 1990, between the
Registrant and Manufacturers Hanover Trust Company
+4.3 -- Indenture dated as of September 11, 1990, between the Registrant
and Manufacturers Hanover Trust Company
++4.4 -- First Supplemental Indenture by and between The Bank of New York
and the Registrant
+++10.1 -- Second Amended and Restated Agreement of Limited Partnership of
Sun Energy Partners, L.P.
+++10.2 -- Agreement of Limited Partnership of Sun Operating Limited Partner-
ship, as amended
++++10.3 -- Registrant's Directors' Deferred Compensation Plan
++++10.4 -- Registrant's Non-Employee Directors' Retirement Plan
++++10.5 -- Employment Agreement between Robert P. Hauptfuhrer and the Regis-
trant
++10.5a -- Amendment to Employment Agreement between Robert P. Hauptfuhrer
and the Registrant, dated June 1, 1989
++++10.5b -- Amendment to Employment Agreement between Robert P. Hauptfuhrer
and the Registrant, dated December 3, 1992
++++10.6 -- Registrant's Pension Restoration Plan
++++++10.6a -- Amendment to Registrant's Pension Restoration Plan
10.7 -- Registrant's Executive Retirement Plan As Amended and Restated as
of January 1, 1992
++++++++10.8 -- Registrant's Executive Long-Term Incentive Plan
++10.8a -- Amendment to Registrant's Executive Long-Term Incentive Plan,
dated February 1, 1989
++10.8b -- Amendment to Registrant's Executive Long-Term Incentive Plan,
dated February 6, 1989
10.9 -- Registrant's 1992 Long-Term Incentive Plan As Amended Through De-
cember 2, 1993 and Restated
++++10.10 -- Registrant's Savings Restoration Plan
++++++10.10a -- Amendment to Registrant's Savings Restoration Plan
</TABLE>
19
<PAGE>
<TABLE>
<C> <S> <C>
++++10.11 -- Registrant's Amended and Restated Executive Deferred Compensation
Plan
++++++10.11a -- Amendment to Registrant's Amended and Restated Executive Deferred
Compensation Plan
++++10.12 -- Registrant's Deferred Compensation and Benefits Trust
++++10.13 -- Registrant's Special Employee Severance Plan
10.14 -- Registrant's Amended and Restated Special Executive Severance Plan
****10.15 -- Revolving Credit and Term Loan Agreement among the Registrant and
the banks named therein, dated as of September 10, 1990
m10.16 -- Sale and Purchase Agreements by and between BP Petroleum Develop-
ment Limited et al and the Registrant
++++10.17 -- Oryx Energy Company Capital Accumulation Plan, As Amended and
Restated Generally Effective as of January 1, 1993
10.17a -- Registrant's Amendment to the Oryx Energy Company Capital Accumu-
lation Plan
++++10.18 -- Oryx Energy Company $620,000,000 Revolving Credit Agreement Dated
as of December 31, 1992
12 -- Computation of Consolidated Ratio of Earnings to Fixed Charges and
Earnings to Fixed Charges and Preferred Stock Dividend
Requirements
13 -- Oryx Energy Company 1994 Annual Report to Shareholders
16 -- Accountant's Preferability Letter
mm19 -- Distribution Agreement dated August 28, 1991 relating to
Medium-Term Notes, Series A
++22 -- Subsidiaries
23 -- Consent of Coopers & Lybrand L.L.P.
24 -- Power of Attorney
<FN>
------------------------
* Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1992 (File No. 1-10053) filed with
the Commission on May 15, 1992.
** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1990 (File No. 1-10053) filed
with the Commission on November 14, 1990.
*** Incorporated by reference to the Registrant's Form 8-K (File No.
1-10053) filed with the Commission on September 25, 1990.
**** Incorporated by reference to the Registrant's Registration Statement on
Form 8-A (File No. 1-10053) filed with the Commission on September 19,
1990.
+ Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-24214) filed with the Commission on September 8,
1988.
++ Incorporated by reference to the Registrant's Amendment No. 2 on Form
S-3 (File No. 33-33361) filed with the Commission on June 29, 1990.
+++ Incorporated by reference to the Form SE of Sun Energy Partners, L.P.
filed with the Commission on March 20, 1986.
++++ Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-27723) filed with the Commission on March 22,
1989.
++ Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-33361) filed with the Commission on February 6,
1990.
</TABLE>
20
<PAGE>
<TABLE>
<C> <S>
++++ Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 (File No. 1-10053)
filed with the Commission on March 22, 1993.
++++++ Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (File No. 1-10053)
filed with the Commission on March 19, 1992.
++++++++ Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-24214) filed with the Commission on September 8,
1988.
m Incorporated by reference to the Registrant's Form 8-K (File No.
1-10053) filed with the Commission on December 26, 1989.
mm Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1991 (File No. 1-10053) filed
with the Commission on November 14, 1991.
</TABLE>
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the quarter ended
December 31, 1994.
21
<PAGE>
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.
ORYX ENERGY COMPANY
By: /s/ EDWARD W. MONEYPENNY
--------------------------------------
EDWARD W. MONEYPENNY
EXECUTIVE VICE PRESIDENT, FINANCE,
CHIEF FINANCIAL OFFICER, AND
DIRECTOR
Date: March 22, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------------------------------------ ------------------------------------ ------------------
<S> <C> <C> <C>
ROBERT L. KEISER* Chairman of the Board, President,
------------------------------------------- and Chief Executive Officer
Robert L. Keiser (principal executive officer)
/s/ EDWARD W. MONEYPENNY Executive Vice President, Finance,
------------------------------------------- Chief Financial Officer (principal
Edward W. Moneypenny financial officer), and Director
ROBERT L. THOMPSON* Comptroller and Corporate Planning
------------------------------------------- Director (principal accounting
Robert L. Thompson officer)
JERRY W. BOX* Executive Vice President,
------------------------------------------- Exploration and Production, and
Jerry W. Box Director
WILLIAM E. BRADFORD* Director March 22, 1995
-------------------------------------------
William E. Bradford
ROBERT B. GILL* Director
-------------------------------------------
Robert B. Gill
DAVID S. HOLLINGSWORTH* Director
-------------------------------------------
David S. Hollingsworth
CHARLES H. PISTOR, JR.* Director
-------------------------------------------
Charles H. Pistor, Jr.
PAUL R. SEEGERS* Director
-------------------------------------------
Paul R. Seegers
IAN L. WHITE-THOMSON* Director
-------------------------------------------
Ian L. White-Thomson
*By: /s/ EDWARD W. MONEYPENNY
--------------------------------------
Edward W. Moneypenny
ATTORNEY-IN-FACT
<FN>
------------------------
*A Power of Attorney authorizing Robert L. Keiser and Edward W. Moneypenny, and
each of them, to sign this Form 10-K Annual Report on behalf of the directors,
constituting a majority of the Board of Directors, and certain officers of Oryx
Energy Company, is being filed with the Securities and Exchange Commission.
</TABLE>
22
<PAGE>
EXHIBIT 10.7
ORYX ENERGY COMPANY
EXECUTIVE RETIREMENT PLAN
AS AMENDED AND RESTATED AS OF JANUARY 1, 1992
(EXCEPT AS OTHERWISE PROVIDED HEREIN)
<PAGE>
ORYX ENERGY COMPANY
EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
<C> <S> <C>
PREAMBLE 1
I Definitions 2-6
II Contributions 7
III Retirement Benefits 8-12
IV Optional Forms of Retirement Income 13-15
V Death Benefits 16-17
VI Termination of Employment or Status
as Executive; Reemployment 18-20
VII Disability Benefits 21
VIII Administration of the Plan 22-25
IX General Provisions 26-28
</TABLE>
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PREAMBLE
Oryx Energy Company (the "Company") adopted and established the Oryx
Energy Company Executive Retirement Plan (the "Plan"), for the exclusive
benefit of certain of its executives and their beneficiaries in November
1988. The Plan superseded the Sun Company, Inc. Executive Retirement Plan
(the "Predecessor Plan") with respect to those Executives of the Company who
had been participants in the Predecessor Plan. Subsequently, the Plan was
amended from time to time. Effective as of January 1, 1995, (except as
otherwise provided herein) the Company has, by execution of this document,
amended and restated the Plan in its entirety, subject to the terms and
conditions hereinafter set forth.
Except as otherwise provided herein, any Participant under the Plan prior
to January 1, 1992, shall receive any benefits to which he or she is entitled
based upon the provisions of the Plan as in effect prior to January 1, 1992;
and any Participant who dies, retires, becomes disabled, terminates employment
or otherwise ceases to be a Participant thereunder on or after January 1, 1992,
but before January 1, 1995 shall receive any benefits to which he or she is
entitled based upon the provisions of the Plan.
The purpose of the Plan is primarily to provide additional retirement
benefits to a select group of highly compensated or management employees of
the Company through an unfunded plan.
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ARTICLE I
DEFINITIONS
1.01 "Actuarial Equivalent" means a benefit of equivalent current value to
the benefit which would otherwise have been provided to the Participant,
determined on the basis of appropriate actuarial assumptions and methods
and in accordance with rules established by the Plan Administrator.
1.02 "Affiliated Company" means the Company and:
(a) Any other corporation which is included within a "controlled group
of corporations" within which the Company is also included,
as determined under section 1563 of the 1986 Internal Revenue Code
without regard to subsections (a)(4) and (e)(3)(C) of said section
1563;
(b) Any other trades or businesses (whether or not incorporated) which,
based on principles similar to those defining a controlled group of
corporations for purposes of (a) above, are under common control;
and
(c) Any other organization so designated by the Board Committee.
1.03 "Affiliated Company Benefit" means the monthly amount of benefit (or the
Actuarial Equivalent of such benefit) to which a Participant and/or his
Spouse is or was entitled under the Base Plan or any other qualified or
nonqualified defined contribution or defined benefit plan (including
any combination of a qualified plan and a related excess benefit plan)
that is or was maintained by an Affiliated Company as the primary source
of employer-provided retirement income for participants of such plan;
provided, however, that in the case of a defined contribution plan, the
value of such Benefit will be determined based on the aggregate
contributions made on behalf of the Participant (whether or not
subsequently withdrawn by the Participant), accumulated at a rate or
rates of interest as determined by the Plan Administrator, which
determination will be made in a uniform and consistent manner.
1.04 "Base Plan" means the Oryx Energy Company Retirement Plan and the Oryx
Energy Company Pension Restoration Plan for Certain Employees of the
Company, or any similar or successor plan or plans.
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1.05 "Beneficiary" means the person or persons, other than a contingent
annuitant, designated by a Participant or retired Participant pursuant
to Article IV.
1.06 "Board of Directors" means the Board of Directors of the Company.
1.07 "Board Committee" means those individual Directors who have been
appointed by the Board of Directors with the powers and responsibilities
specified in Article VIII and to which has been delegated any authority
or responsibility of the Board of Directors with respect to the Plan.
1.08 "Company" means Oryx Energy Company or any corporation which succeeds to
the position of Oryx Energy Company as common parent of the controlled
group of corporations, within the meaning of regulations issued under the
Internal Revenue Code.
1.09 "Credited Service," subject to the limitations hereinafter described,
means the actual amount, in completed years and months, of the
Participant's Service.
Credited Service will not include periods of employment with an
Affiliated Company before or after it becomes or ceases to be an
Affiliated Company.
1.10 "Earnings" means the "Earnings" of a Transferred Participant under the
Predecessor Plan through October 31, 1988, and the total basic
compensation paid or payable to a Participant by the Company or an
Affiliated Company on and after November 1, 1988.
1.11 "Employee" means the individual who is employed by the Company or an
Affiliated Company.
1.12 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.13 "Executive" means any Employee who is employed by the Company as a
principal officer, or in a job which, in accordance with the Company's
job evaluation program, has been assigned 1400 or more Hay points, and
any other Employee who is designated by the Board Committee as being an
Executive for purposes of this Plan and whom the Board Committee
determines to be a member of a select group of management or highly
compensated employees.
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However, effective December 31, 1994, "Executive" means any Employee
employed by the Company at the level of Vice President or above.
1.14 "Executive Service" means "Executive Service" earned by a Transferred
Participant under the Predecessor Plan through October 31, 1988, and that
part of a Participant's Service which was rendered on and after November
1, 1988, while he was an Executive.
1.15 "Final Average Earnings" means the arithmetic average of the
Participant's considered earnings over the 36 consecutive calendar months
which are within the last 120 consecutive calendar months prior to the
actual retirement that produce the highest average of all such 36-month
periods. The Participant's considered earnings during any such 36-month
period equal: the Participant's aggregate Earnings; plus, any executive
incentive bonuses imputed during that 36-month period, as described in
the following sentences. One executive incentive bonus will be imputed
each calendar year equal to the Participant's guideline incentive
percentage in effect as of the date the Participant's first actual
executive incentive bonus payment is made in that calendar year under the
Oryx Energy Company Executive Incentive Plan, multiplied by the
Participant's annualized base rate of pay in effect as of that same date
and will be deemed to be considered earnings for the month in which the
first actual executive incentive bonus payment is made for such calendar
year. If no such bonus is paid to the Participant, while he is an
Employee, in a calendar year, a bonus will be imputed as described using
the guideline percentage and rate of pay in effect as of February 1 of
that calendar year and will be deemed to be considered earnings for such
February (except that if the Participant's termination of employment
occurred in January, then his rate of pay as of January 1 will be used
and the imputed bonus will be deemed considered earnings for such
January). These "imputed executive incentive bonuses" will be used to
determine Final Average Earnings under this Plan only, and without regard
to the actual executive incentive bonuses received by the Participant
under the Oryx Energy Company Executive Incentive Plan. If during any
such 36-month consecutive month period a Participant has four of such
"imputed executive incentive bonuses," then the imputed bonus amount that
is the least of the four amounts will be disregarded.
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1.16 "Nonaffiliated Employer Benefit" means the monthly amount of Benefit, (or
the Actuarial Equivalent of such Benefit) to which a Participant and/or
his Spouse is or was entitled as a result of prior employment with any
employer other than the Company or an Affiliated Company under any
qualified or nonqualified defined contribution or defined benefit
retirement plan that is or was maintained by such employer as the primary
source of employer-provided retirement income for participants of such
plan; provided, however, that in the case of a defined contribution plan,
the value of such Benefit will be determined based on the aggregate
contributions made on behalf of the Participant (whether or not
subsequently withdrawn by the Participant), accumulated at a rate or
rates of interest as determined by the Plan Administrator, which
determination will be made in a uniform and consistent manner.
1.17 "Normal Retirement Date" means the first day of the calendar month
coincident with or next following the Participant's 65th birthday.
1.18 "Participant" means any Employee who is an Executive, a Transferred
Participant or who is designated as a Participant by the Board Committee.
Except as provided in Section 6.02, if any Participant ceases to be an
Executive, he will thereupon cease to be a Participant (unless otherwise
designated by the Board Committee), and will forfeit all rights to
benefits under this Plan.
1.19 "Plan" means the Oryx Energy Company Executive Retirement Plan as set
forth in this document and as it may from time to time be amended.
1.20 "Plan Administrator" means the individual or entity designated as such by
the Board Committee pursuant to Article VIII.
1.21 "Plan Year" means the annual period beginning on January 1 of any year
and ending on the following December 31.
1.22 "Predecessor Plan" means the Sun Company, Inc. Executive Retirement Plan
as it existed on October 31, 1988.
1.23 "Service" means the completed years and months of "Service" earned by a
Transferred Participant under the Predecessor Plan through October 31,
1988, and
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the completed years and months of an Employee's employment by
the Company or an Affiliated Company on and after November 1, 1988,
whether or not continuous.
1.24 "Social Security Benefit" means the primary insurance amount to which a
Participant becomes entitled at age 65 under Social Security legislation
in effect on the earliest of his Normal Retirement Date, early retirement
date or Termination Date.
1.25 "Spouse" means the individual who is the legally married husband or wife
of a Participant.
1.26 "Statutory Benefit" means the monthly amount of any benefit (or the
Actuarial Equivalent of such benefit) from any country other than the
United States to which a Participant, upon proper application, is or
would be entitled.
1.27 "Termination Date" means the date on which a Participant ceases to be an
Employee.
1.28 "Transferred Participant" means a person for whom the Predecessor Plan
transferred liability to the Plan effective November 1, 1988.
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ARTICLE II
CONTRIBUTIONS
2.01 EMPLOYER CONTRIBUTIONS. All benefits payable under this Plan will be
paid by the Company solely out of its general assets.
2.02 PARTICIPANT CONTRIBUTIONS. No contributions by Participants will be
required or permitted under this Plan.
2.03 EXPENSES OF ADMINISTRATION. All expenses of administering this Plan will
be paid by the Company.
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ARTICLE III
RETIREMENT BENEFITS
3.01 NORMAL RETIREMENT. Except as provided in Section 3.04, each Participant
will be eligible to retire on his Normal Retirement Date.
3.02 NORMAL RETIREMENT INCOME. Subject to the provisions of Section 3.03, a
Participant who retires on or after his Normal Retirement Date and after
the completion of five years of Executive Service will be entitled to a
monthly normal retirement income equal to the excess of (a) over (b),
where:
(a) equals the sum of:
(i) 3% of his Final Average Earnings multiplied by his Credited
Service up to a maximum of 10 years, plus
(ii) 1-1/2% of his Final Average Earnings multiplied by his
Credited Service in excess of 10 years, and
(b) equals the sum of:
(i) 1-2/3% of his Social Security Benefit multiplied by his
Credited Service up to a maximum of 30 years,
(ii) 100% of his Affiliated Company Benefit, plus
(iii) 100% of his Statutory Benefit.
3.03 MAXIMUM NORMAL RETIREMENT INCOME.
(a) The monthly normal retirement income which a Participant would
otherwise be entitled to receive under Section 3.02 will not
exceed 65% of his Final Average Earnings less 1-2/3% of his
Social Security Benefit multiplied by his Service, up to a
maximum of 30 years.
(b) Section 3.3(a) shall not apply to limit that part of the benefit
attributable to incentive compensation under Section 1.15(2) to
the extent that the participant made an election to defer
incentive compensation pursuant to the Oryx Energy Company
Executive Deferred
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Compensation Plan or a Transferred Participant made an election
to defer incentive compensation pursuant to the Sun Company, Inc.
Deferred Compensation Plan.
3.04 EARLY RETIREMENT DATE. A Participant will be eligible to retire on an
early retirement date which will be the first day of any calendar month
coincident with or next following his 55th birthday if he has then
completed at least five years of Executive Service.
3.05 EARLY RETIREMENT INCOME. The monthly early retirement income payable to
the Participant commencing on his early retirement date will be equal to
the monthly normal retirement income that would otherwise be applicable
under Sections 3.02 and 3.03, adjusted as follows:
(a) The Social Security Benefit referred to in Sections 3.02 and 3.03
will be determined by projecting the Participant's Credited Service
to his Normal Retirement Date (but such projected Credited Service
shall not exceed 30 years) and assuming constant Earnings, at his
last rate in effect, to Normal Retirement Date, and will then be
multiplied by a fraction, the numerator of which will be his
Credited Service to the date of actual retirement and the
denominator of which will be his projected Credited Service to
Normal Retirement Date.
(b) The amount calculated in Section 3.02(a) will be reduced by
5/12% for each full month by which actual retirement precedes
Normal Retirement Date by more than five years, and the offset
for Social Security Benefits calculated in Sections 3.02(b) and
3.03 will be reduced by 7/12% for each full month by which actual
retirement precedes Normal Retirement Date during the five-year
period immediately preceding Normal Retirement Date, and 7/24% for
each full month that actual retirement precedes Normal Retirement
Date by more than five years.
3.06 NORMAL FORM OF BENEFIT. Except as provided for in Article IV, a
Participant's retirement benefits under this Plan will be paid in the
form of a lump sum equal to the lump sum present value of the retirement
income determined under Sections 3.02, 3.03 and 3.05, whichever is
applicable. For purposes of determining such lump-sum present value:
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(i) the interest rate and mortality assumptions that would apply to such
Participant at such time for such purpose under the Oryx Energy Company
Retirement Plan shall be used; and (ii) the value of any early retirement
and survivor benefits subsidies otherwise included in the determination
of benefits under the Plan shall be reflected in such lump-sum amount.
3.07 TIME OF PAYMENT. The payment of a Participant's retirement benefits shall
be made or commence no later than the last day of the calendar month in
which the Participant retires.
3.08 SPECIAL ENHANCEMENT PROGRAM.
(a) SPECIAL ENHANCEMENT PROGRAM. Effective January 1, 1993, a
Participant who meets the requirements for a benefit under the
Special Enhancement Program, as set forth in Section 3.08(b),
shall have the Early Retirement Income under Section 3.05 or the
Normal Retirement Income under Section 3.02, whichever is
applicable, calculated in accordance with Section 3.08(b) below,
subject to 3.08(c) below. For purposes of this Section 3.08, the
following definitions shall apply.
(i) ADJUSTED AGE - Adjusted Age shall be a Participant's actual
age plus three years. For purposes of the benefit under
Section 3.08(a), a Participant's Adjusted Age shall not
exceed 60.
(ii) ADJUSTED SERVICE - Adjusted Service shall be a Participant's
actual Service plus three years.
(iii) ADJUSTED CREDITED SERVICE - Adjusted Credited Service shall
be a Participant's actual Credited Service plus three years.
(b) ENHANCED RETIREMENT BENEFIT. A Participant shall be eligible for
an Enhanced Retirement Benefit under this Section if his employment
with the Employer terminated under an outplacement program during
1993 or 1994 and his Adjusted Age is at least 55 and his Executive
Service equals at least five years. A Participant who meets the
requirements for an Enhanced Retirement Benefit shall have his
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benefit determined in accordance with Section 3.02, 3.03 or 3.05,
as applicable, provided that:
(i) The amounts set forth in Section 3.02(a) and (b)(i) shall be
determined using the Participant's Adjusted Credited Service,
rather than his actual Credited Service; provided that for
purposes of determining the Social Security Benefit offset
amount described in Section 3.05(a), a Participant's Adjusted
Credited Service shall be used only in the numerator of the
fraction included in Section 3.05(a) (except such fraction so
determined cannot exceed 1.0).
(ii) The reductions described in Section 3.05(b), for commencement
of a Participant's benefit that precedes Normal Retirement
Date, shall be determined by reference to the number of full
months that his Adjusted Age precedes his age at his Normal
Retirement Date, rather than the number of full months that
his actual retirement precedes his Normal Retirement Date.
(iii) To the extent that under the terms of the Plan, a Participant
who has met the early retirement eligibility requirements, or
the beneficiary of such a Participant, is entitled to select
optional payment forms, or to receive death benefits, a
Participant who meets such requirements solely as a result of
this Section shall be deemed to have met the early retirement
eligibility requirements.
(c) MINIMUM BENEFIT. If the amount of any Participant's Enhanced
Retirement Benefit determined above in this Section 3.08 (which is
determined by using an enhanced Affiliated Company Benefit offset
from the Oryx Energy Company Retirement and Pension Restoration
Plans, in accordance with the Special Enhancement Program
thereunder) is less than what such Participant's regular unenhanced
Retirement Income would be hereunder if both the Special
Enhancement Program described above
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in this Section 3.08 and the Special Enhancement Program described
in the Base Plan were disregarded, then such Participant shall
have his Retirement Income determined hereunder by disregarding
the Special Enhancement Program under this Plan and disregarding
the Special Enhancement Program under the Base Plan.
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ARTICLE IV
OPTIONAL FORMS OF RETIREMENT INCOME
4.01 ELECTION OF STRAIGHT LIFE ANNUITY OR OTHER OPTIONAL FORM OF PAYMENT. Not
later than thirty (30) days prior to a Participant's retirement date, a
Participant may elect, in lieu of the lump-sum normal form of retirement
benefits, a straight life annuity (equal to the monthly normal retirement
income determined under Sections 3.02, 3.03 and 3.05, whichever is
applicable) or an optional form of retirement income as set forth below.
A Participant may not change or revoke an elected option unless such
change is made thirty (30) days prior to the Participant's retirement
date. Each election, designation and revocation of an option will be made
in writing and in conformity with such rules as may be prescribed by the
Plan Administrator. Notwithstanding the foregoing, a Spouse may not
elect an optional form of receiving any benefit payable under Article V.
4.02 CONTINGENT ANNUITY OPTION. A Participant may elect to receive a reduced
retirement income, the amount of which will be determined by application
of appropriate Actuarially Equivalent factors adopted by the Plan
Administrator for the age and sex of the Participant and the contingent
annuitant. The contingent annuity option provides (a) payments to the
Participant for his life, and (b) continuation of such payments, or any
part of them designated by the Participant, to the contingent annuitant,
if surviving, for life.
4.03 TEN-YEAR CERTAIN OPTION. A Participant may elect to receive a retirement
income of Actuarially Equivalent value payable for his life, provided
that such income will be paid to him or to his Beneficiary for ten years
after the Participant's retirement regardless of whether the Participant
or his Beneficiary survives such period. At the discretion of the Plan
Administrator, any benefit payable hereunder to a Beneficiary may be
commuted and paid in one sum.
4.04 OTHER FORMS OF PENSION. A Participant may elect to receive a benefit
payable over a period not less than his remaining lifetime and, if he so
further elects, thereafter to his designated Beneficiary for as long as
his designated Beneficiary survives him
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in such other form having an Actuarially Equivalent value as may be
approved by the Plan Administrator and subject to such conditions as he
may prescribe.
4.05 RULES APPLICABLE TO CONTINGENT ANNUITY OPTION.
(a) If the Participant should die before the effective date of the
contingent annuity option, no benefit will be payable to the
contingent annuitant.
(b) If the contingent annuitant should die before the effective date of
the contingent annuity option, the option will automatically be
cancelled and the normal monthly retirement income will be payable
to the Participant in a straight life annuity as provided in
Section 4.01 as if the contingent annuity option had not been
elected.
(c) If the contingent annuitant should die before the Participant but
after the effective date of the contingent annuity option, benefits
will be payable or continue to be paid to the Participant on the
reduced basis; provided, however, that if the contingent annuitant
should die during the first four years following commencement of
the retirement income payments to the Participant, the amount of
the reduced retirement income payable to the surviving retired
Participant will be increased by restoring a percentage of the
reduction amount as follows:
<TABLE>
<CAPTION>
DEATH OF CONTINGENT PERCENTAGE OF
ANNUITANT DURING DISCOUNT RESTORED
---------------- -----------------
<S> <C>
First Year 80%
Second Year 60%
Third Year 40%
Fourth Year 20%
Fifth and Subsequent Years 0%
</TABLE>
(d) If the retirement date is earlier than the effective date of the
contingent annuity option, retirement benefits commencing at the
actual retirement date will be made in the straight life annuity
form of retirement income, as provided in Section 4.01. If the
Participant and his contingent annuitant are living on such
effective date, the retirement benefit will be adjusted to
provide retirement income on and after such date on the optional
form.
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4.06 ACCELERATION OF ANNUITY OPTIONS. Notwithstanding the foregoing, if the
Internal Revenue Service makes a determination that the Participant must
include any amounts from the Plan in his taxable income in a taxable year
prior to the year in which the Participant actually receives those
amounts, the Participant shall receive the Actuarial Equivalent of the
remainder of his benefit determined under Sections 3.02, 3.03 and 3.05,
whichever is applicable. Such distribution shall be made no later than
the last day of the calendar year in which the Participant informs the
Plan Administrator that the Internal Revenue Service has made such a
determination.
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ARTICLE V
DEATH BENEFITS
5.01 PRERETIREMENT SPOUSE'S DEATH BENEFIT. The actual form of payment
(monthly annuity or lump-sum) of the death benefit described in this
Section shall, notwithstanding anything to the contrary herein, be
determined in accordance with Section 5.02 hereof. In the event of the
death of a Participant during active employment and after having become
eligible to elect an early retirement date, a death benefit in the form
of monthly retirement income in the amount hereinafter set forth will be
payable to the Participant's Spouse at the time of his death for the
lifetime of such Spouse. The amount of each such monthly income payment
will be 50% of the monthly early retirement income that would have been
payable to the Participant under Section 3.05 had he retired on the date
of his death; provided, however, that:
(a) the reduction specified in Section 3.02(b)(ii) with respect to the
Participant's Affiliated Company Benefit will not be applicable;
(b) the early retirement reduction percentage described in Section
3.05(b) will be applied only to the offset for Social Security
Benefits;
(c) the monthly income payments to the Spouse will be reduced by 1/2%
for each month that the Spouse is more than ten years younger than
the Participant; and
(d) the amount payable to the Spouse will be reduced by any amount of
Affiliated Company Benefits that are attributable to Affiliated
Company contributions and that are payable to such Spouse.
5.02 ELECTION OF PAYMENT FORM OF PRERETIREMENT SPOUSE'S DEATH BENEFIT. A
Participant who is eligible to elect an early retirement date may elect
to have the preretirement spouse's death benefit under Section 5.01 paid
in an annuity form pursuant to Section 5.01, or in an Actuarially
Equivalent lump-sum as soon as practicable after the Participant's death.
A Participant may change or revoke an elected option at any time prior to
his actual retirement. Each election, designation and revocation of an
option
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will be made in writing and in conformity with such rules as may
be prescribed by the Plan Administrator.
5.03 POSTRETIREMENT SPOUSE'S DEATH BENEFIT. In the event a Participant dies
after retiring or after attaining his Normal Retirement Date, and
provided the Participant's benefit was payable to him in a monthly form
under Article IV hereof, the Spouse to whom he is married on his annuity
starting date will receive a monthly retirement income payable for the
lifetime of such Spouse in an amount equal to 50% of the retirement
income being paid or payable to the Participant (before giving effect to
any reduction in income required by the election of an contingent annuity
or period certain optional form of payment under Article IV); provided,
however, that:
(a) the reduction specified in Section 3.02(b)(ii) with respect to the
Participant's Affiliated Company Benefit will not be applicable;
(b) the monthly income payable to the Spouse will be reduced by 1/2%
for each month that the Spouse is more than ten years younger than
the Participant; and
(c) the amount payable to the Spouse will be reduced by any amount of
spousal Affiliated Company Benefits that are attributable to
Affiliated Company contributions and that are attributable to such
Spouse (even though such amounts may not actually be payable to
such Spouse, due to a waiver of such amounts and/or election to
receive any Affiliated Company Benefits in an optional form not
providing a spousal benefit).
The Spouse's death benefit payable under this Section will be in addition
to any annuity benefits otherwise payable under Article IV. In the event
the Participant did not have a Spouse on his annuity starting date, but
is survived by a Spouse on the date of his death, the monthly retirement
income described above shall be paid to such surviving spouse.
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ARTICLE VI
TERMINATION OF EMPLOYMENT OR STATUS
AS EXECUTIVE; REEMPLOYMENT
6.01 TERMINATION OF EMPLOYMENT. A Participant whose employment is terminated
for any reason other than death under Article V or retirement under
Section 3.01 or 3.04, will not be entitled to benefits under this Plan.
6.02 TERMINATION OF EXECUTIVE STATUS. If a Participant remains employed by
the Company or an Affiliated Company but ceases to be an Executive, he
will forfeit the right to all benefits under this Plan unless otherwise
designated to remain as a Participant by the Board Committee or unless he
had attained his 55th birthday and completed at least five years of
Executive Service at the time he ceased to be an Executive. If any such
Participant is designated by the Board Committee as being eligible to
remain a Participant even though no longer an Executive, the Participant
will continue as such for all purposes of this Plan. If the Participant
is not so designated by the Board Committee but has attained his 55th
birthday and has completed at least five years of Executive Service, he
will remain a Participant, but will be entitled to benefits based only
upon his Service, Credited Service and Final Average Earnings as of the
date he ceased to be an Executive. Furthermore, for purposes of the
preceding sentence, with respect to any Participant who ceases to be an
Executive as of December 31, 1994, by reason of the change in the
definition of Executive for Plan Years beginning on and after such date,
and who, on December 31, 1994, has attained age 55 and has completed
5 years of Executive Service, such Participant's benefits under the Plan
shall be (i) determined as if the Employee had retired hereunder on
December 31, 1994, (ii) shall not be affected by an increase thereafter
of the Participant's Affiliated Company Benefit due to the Partcipant's
subsequent service or compensation, and (iii) any reduction in the
Participant's Affiliated Company Benefit for commencement of the benefit
under the Plan prior to Normal Retirement Date shall be determined on
the basis of the Employee's actual early retirement date. Any benefits
payable to a Participant who has ceased to be an Executive shall not be
paid until actual
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retirement or death, in accordance with Articles III and IV above.
6.03 REEMPLOYMENT.
(a) If a retired Participant is reemployed by the Company or an
Affiliated Company, his benefits will thereupon cease, and upon
again becoming such an Employee he will have his prior period of
Service, Credited Service and Executive Service restored to him.
If he had made an election of an optional form of payment, such
election will continue on file with the Plan Administrator, but no
payment will be due under such option in the event of his death
before he again retires. Upon subsequent retirement his retirement
income will be based on his Service and Credited Service which was
restored under this Section plus any Service and Credited Service
rendered while employed as an Executive after the time of his
reemployment.
(b) In all other situations where a retired Participant is reemployed,
there will be no cessation, interruption or adjustment of his
retirement income.
6.04 CHANGE IN CONTROL. Notwithstanding any other provisions of the Plan, all
Participants shall become fully vested upon a Change in Control of the
Company and, upon termination of service from the Company shall be
entitled to benefits calculated as follows:
(a) If at the time of termination of service, the Participant has
attained his Early Retirement Date, he shall be entitled to a
benefit calculated in accordance with Section 3.05.
(b) If at the time of termination of service, the Participant has not
attained his early retirement date, he shall be entitled to
benefits calculated under Section 3.05 with the exception that the
benefits so determined shall, in lieu of the reductions provided
under Section 3.05(b), be reduced actuarially in accordance with
reasonable and appropriate actuarial factors.
Such benefits shall commence coincident with or next following the first
day of the calendar month in which the Participant attains age 55.
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As used in the Plan a "Change in Control" shall be deemed to have
occurred if (a) individuals who were directors of the Company immediately
prior to a Control Transaction shall cease, within two years of such
Control Transaction, to constitute a majority of the Board (or of the
Board of Directors of any successor to the Company or to all or
substantially all of its assets) or (b) any entity, person or Group
acquires shares of the Company in a transaction or series of transactions
that result in such entity, person or Group directly or indirectly owning
beneficially fifty-one percent (51%) or more of the outstanding shares.
As used herein, "Control Transaction" shall be (1) any tender offer for
or acquisition of capital stock of the Company, (2) any merger,
consolidation, or sale of all or substantially all of the assets of the
Company which has been approved by the shareholders, (3) any contested
election of directors of the Company or (4) any combination of the
foregoing which results in a change in voting power sufficient to elect a
majority of the Board of Directors. As used herein, "Group" shall mean
persons who act in concert as described in Sections 13(d)(3) and/or
14(d)(2) of the Securities Exchange Act of 1934, as amended.
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ARTICLE VII
DISABILITY BENEFITS
7.01 PARTICIPANTS RECEIVING DISABILITY BENEFITS. A Participant receiving
disability benefits under the Oryx Energy Company Disability Income
Program will remain a Participant. Such a Participant will be entitled
to a monthly normal retirement income, to commence at his Normal
Retirement Date, computed in accordance with Section 3.02 or 3.03, as
applicable, assuming constant Earnings and guideline bonus to Normal
Retirement Date, Social Security benefits as calculated under the Social
Security Act in effect on the Participant's date of disability, and
including as Service, Credited Service and Executive Service, the period
during which he qualifies for and receives disability benefits under the
Oryx Energy Company Disability Income Program. Such determination will
be made as of Normal Retirement Date. The normal form for the payment of
retirement income to the Participant will be as set forth in Section
3.069.
7.02 STATUS DURING DISABILITY. A Participant receiving Oryx Energy Company
Disability Income Program benefits prior to his Normal Retirement Date
will be entitled to benefits under Section 5.01 and, if applicable,
Section 5.02. After his Normal Retirement Date, he will be deemed to
have retired. Such a Participant, If otherwise eligible, may also elect
to retire early under the provision of Section 3.04.
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ARTICLE VIII
ADMINISTRATION OF THE PLAN
8.01 ALLOCATION AND DELEGATION OF ADMINISTRATIVE RESPONSIBILITIES.
Administrative responsibilities with respect to the Plan are to be
allocated as set forth in this Article VIII. A person will have only
those specific powers, duties, responsibilities and obligations as are
specifically given him under this Plan. It is intended that each person
be responsible for the proper exercise of his own powers, duties,
responsibilities and obligations under this Plan, and generally will not
be responsible for any act or failure to act of another person. A person
may delegate to any person or entity any of its powers or duties under
the Plan.
8.02 POWERS AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS. The Board of
Directors has the following powers and responsibilities:
(a) to authorize amendments to the Plan;
(b) to terminate the Plan; and
(c) to appoint and remove members of the Board Committee, as set forth
in Section 8.03, below.
8.03 BOARD COMMITTEE.
(a) The Board Committee will consist of at least three Directors who
will be appointed by and serve at the pleasure of the Board of
Directors. The Board of Directors will also appoint one member of
the Board Committee to act as Chairman of such Committee. Vacancies
will be filled in the same manner as appointments. Any member of
the Board Committee may resign by delivering a written resignation
to the Board of Directors, to become effective upon delivery or at
any other date specified therein.
(b) The members of the Board Committee will appoint a Secretary who
may, but need not be, a member of the Board Committee. The Board
Committee may, in writing, delegate some or all of its powers and
responsibilities as specified in Section 8.03(d) to any other
person or entity.
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(c) The Board Committee will hold meetings upon such notice, at such
time or times, and at such place or places as it may determine.
The majority of the members of the Board Committee at the time in
office will constitute a quorum for the transaction of business at
all meetings and a majority vote of those present at any meeting
will be required for action. The Board Committee may also act by
written consent of a majority of its members.
(d) The Board Committee will have the following powers and
responsibilities:
(i) to prepare periodic administration reports to the Board of
Directors which will show, in reasonable detail, the
administrative operations of the Plan;
(ii) to appoint and remove the Plan Administrator;
(iii) to appoint and remove other administrative personnel; and
(iv) to designate, in its discretion, individuals as "Executives"
and "Participants" hereunder.
Determinations made by the Board Committee shall be final and
conclusive for all purposes.
8.04 PLAN ADMINISTRATOR.
(a) The Plan Administrator will be appointed by and serve at the
pleasure of the Board Committee. The Plan Administrator may resign
by delivering a written resignation to the Board Committee, to be
effective on delivery or at any other date specified therein. Upon
the resignation or removal of the Plan Administrator, a successor
Plan Administrator will be appointed by the Board Committee.
(b) The Plan Administrator may, in writing, delegate some or all of his
powers and responsibilities as set forth in Section 8.04(c) to any
other person or entity.
(c) The Plan Administrator will adopt such rules for administration of
the Plan as he considers desirable, provided they do not conflict
with
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the Plan. Records of administration of the Plan will be kept, and
Participants and their Spouses, Beneficiaries and contingent
annuitants may examine records pertaining directly to themselves.
The Plan Administrator will have the following powers and
responsibilities:
(i) to select and terminate an actuary for the Plan;
(ii) to establish and maintain claims review procedures;
(iii) the discretionary power to construe and interpret the Plan,
correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to administer the
Plan, with any instructions or interpretation of the Plan
made in good faith by the Plan Administrator to be final and
conclusive for all purposes;
(iv) to comply with any requirements of ERISA with respect to
filing reports with governmental agencies;
(v) to provide Employees with any and all information required
by ERISA;
(vi) to approve any actuarial assumptions;
(vii) to coordinate any necessary audit process with respect to
reports on administration data; and
(viii) to conduct routine Plan administration.
8.05 EMPLOYMENT OF AGENTS. Persons administering the Plan may retain such
counsel, actuarial, medical, accounting, clerical and other services as
they may require to carry out the provisions and purposes of the Plan.
8.06 RELIANCE ON REPORTS AND CERTIFICATES. Persons administering the Plan and
the officers and managers and Employees of the Company and any Affiliated
Company will be entitled to rely upon all tables, valuations,
certificates and reports furnished by any duly appointed actuary,
insurance company, or by any duly appointed accountant, and upon all
opinions given by any duly appointed legal counsel.
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8.07 COMPENSATION. Persons administering the Plan will not receive any
compensation for their services as such.
8.08 ABSTENTION REQUIRED. No one may act, vote or otherwise influence a
decision specifically relating to his own participation under the Plan.
8.09 LIABILITY FOR ADMINISTRATION OF THE PLAN. In the administration of the
Plan, no person administering the Plan, nor any officer, director or
employee of the Company or any Affiliated Company or any of their agents
will be liable jointly or severally for any loss due to his or its error
or acts of omission or commission, except for his or its own individual
misconduct.
In the event and to the extent not insured against under any contract of
insurance with an insurance company, the Company shall indemnify and hold
harmless each "Indemnified Person," as defined below, against any and all
claims, demands, suits, proceedings, losses, damages, interest,
penalties, expenses (specifically including, but not limited to counsel
fees to the extent approved by the Board Committee or otherwise provided
by law, court costs and other reasonable expenses of litigation), and
liability of every kind, including amounts paid in settlement, with the
approval of the Board Committee, arising from any action or cause of
action related to the Indemnified Person's act or acts or failure to act.
Such indemnity shall apply regardless of whether such claims, demands,
suits, proceedings, losses, damages, interest, penalties, expenses, and
liability arise in whole or in part from the negligence or other fault of
the Indemnified Person, except when the same is judicially determined to
be due to gross negligence, fraud, recklessness, willful or intentional
misconduct of such Indemnified Person. "Indemnified Person" shall mean
each member of the Board, the Board Committee, the Plan Administrator and
each other Employee who is allocated any responsibility hereunder.
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ARTICLE IX
GENERAL PROVISIONS
9.01 RIGHT TO AMEND OR TERMINATE. The Company expects and intends to continue
the Plan indefinitely, but necessarily reserves the right, by action of
the Board of Directors or its delegate, to amend, alter, suspend or
terminate the Plan in whole or in part, and at any time. The Plan may be
amended retroactively, except that no amendment may reduce or eliminate
benefits that have previously become payable under the Plan, nor benefits
accrued as of a Change in Control.
9.02 ALIENATION OF BENEFITS. Subject to Sections 9.03 and 9.09 below, no
benefits payable under the Plan will be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge, and any action by way of anticipating, alienating, selling,
transferring, assigning, pledging, encumbering or charging the same will
be void and of no effect nor will any such benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements
or torts of the person entitled to such benefit; provided, however, that
benefits may be paid in accordance with a qualified domestic relations
order referred to in ERISA Section 514(b)(7).
9.03 PAYMENT TO MINORS AND INCOMPETENTS. If a Participant, Spouse, contingent
annuitant or Beneficiary entitled to receive any benefits hereunder is a
minor, or is deemed by the Plan Administrator or is adjudged to be
legally incapable of giving a valid receipt and discharge for such
benefits, they will be paid to the duly appointed guardian or committee
of such minor or incompetent, or they may be paid to such person or
persons who the Plan Administrator believes is or are caring for or
supporting such minors or incompetents. Any such payments, to the extent
thereof, will be a complete discharge for the payment of such benefit.
9.04 UNCLAIMED BENEFITS. If any benefit under the Plan had been payable to
and unclaimed by any person for a period of four years since the
whereabouts or existence of such person was last known to the Plan
Administrator, the Plan Administrator may direct that all rights of such
person to payments accrued and to future payments be terminated
absolutely,
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provided that if such person subsequently appears and identifies himself
to the satisfaction of the Plan Administrator, then the liability will be
reinstated.
9.05 PLAN VOLUNTARY. The Plan is purely voluntary on the part of the Company.
Neither the establishment of the Plan, nor any amendment thereto, nor the
creation of any fund or account, nor the payment of any benefit will be
construed as conferring upon any Employee or Participant the right to be
retained in the employ of the Company or any Affiliated Company, and all
Employees and Participants will remain subject to discharge, discipline
or termination to the same extent as if the Plan had never been
established.
9.06 GENDER. Whenever used herein, the masculine pronoun will include the
feminine and the singular the plural, unless a different meaning is
plainly required by the context.
9.07 CONSTRUCTION. The Plan will be construed, enforced and administered
according to the laws of the State of Texas, to the extent not preempted
by Federal law. In the event any provision of the Plan is held illegal
or invalid for any reason, it will not affect the remaining provisions of
the Plan, but the Plan will be construed and enforced as if such illegal
and invalid provision had not been included therein.
9.08 FUNDING. This Plan is intended to be an unfunded plan within the meaning
of ERISA and the Internal Revenue Code. All amounts paid under this Plan
shall be paid in cash from the general assets of the Company or such
other funding vehicle as the Board of Directors shall provide; provided,
however, that all assets paid into any funding vehicle hereunder shall at
all times prior to payment to a Participant, Beneficiary or Spouse remain
subject to the claims of general unsecured creditors of the Company. The
benefits under the Plan shall be reflected on the accounting records of
the Company, but absent action by the Board of Directors shall not be
construed to create, or require the creation of, a trust, custodial or
escrow account, or other fund of any kind.
No Participant or any other person shall have any right, title, or
interest whatever in or to, or any preferred claim in or to, any
investment reserves,
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accounts, or funds that the Company may purchase, establish, or
accumulate to aid in providing the payments described in this Plan.
Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust or a fiduciary
relationship of any kind between the Company and a Participant or any
other person. Neither a Participant nor a Beneficiary or Spouse shall
acquire any interest in any assets of the Company or in any investment
reserves, accounts, or funds that the Company may purchase, establish or
accumulate for the purposes of paying benefits hereunder.
9.09 TAX WITHHOLDING. The Company may withhold or cause to be withheld from
or with respect to any benefit hereunder any federal, state, or local
taxes required by law to be withheld with respect to such benefit and
such sum as the Company may reasonably estimate as necessary to cover any
taxes for which the Company may be liable and which may be assessed with
regard to such payment.
9.10 EXECUTION IN COUNTERPARTS. This document may be executed in one or more
counterparts, each of which shall be considered an original, and all but
one instrument.
IN WITNESS WHEREOF, Oryx Energy Company has caused this Plan to be
executed by its duly authorized officer this 9th day of February, 1995.
By: /s/ Frances G. Heartwell
-----------------------------
Title: Director of Human Resources
ATTEST:
By: /s/ William C. Lemmer
---------------------------
Title: Vice President, General Counsel and Secretary
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EXHIBIT 10.9
ORYX ENERGY COMPANY
1992 LONG-TERM INCENTIVE PLAN
AS AMENDED THROUGH DECEMBER 2, 1993 AND RESTATED
<PAGE>
ARTICLE I
PURPOSE
1.1 PURPOSE. The purpose of the Oryx Energy Company 1992 Long-Term Incentive
Plan (this "Plan") is to strengthen the ability of Oryx Energy Company (the
"Company") to attract, motivate, and retain employees of superior capability and
to more closely align the interests of management with those of stockholders of
the Company by relating capital accumulation to increases in stockholder value.
ARTICLE II
GENERAL DEFINITIONS
2.1 "Agreement" - The written instrument evidencing the grant to a
Participant of an Incentive Award. Each Participant may be issued one or
more Agreements from time to time, containing one or more Incentive Awards,
singly, in combination, or in tandem.
2.2 "Board" - The Board of Directors of the Company.
2.3 "Code" - The Internal Revenue Code of 1986, as amended.
2.4 "Committee" - The Committee that the Board appoints to administer this
Plan.
2.5 "Common Stock" - The common stock of the Company as described in the
Company's Certificate of Incorporation, or such other stock as shall be
substituted therefor.
2.6 "Company" - Oryx Energy Company, or any successor to the Company.
2.7 "Contingent Stock Option" - A Stock Option granted under the provisions
of Section 7.6.
2.8 "Date of Grant" - The date on which the granting of an Incentive Award
is authorized by the Committee, unless another date is specified by the
Committee or by a provision in this Plan applicable to the Incentive Award.
2.9 "Deferred Compensation Stock Option" - A Stock Option granted under the
provisions of Section 7.5 and designated as such.
2.10 "Disposition" - Any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary,
and whether during the Participant's lifetime or upon or after his or her
death, including, but not limited to, any disposition by operation of law, by
court order, by judicial process, or by foreclosure, levy, or attachment.
2.11 "Dividend Equivalent" - The additional amount of Common Stock or cash
credited at the discretion of the Committee in connection with an Incentive
Award, which shall be equal to the cash or Fair Market Value of stock
dividends that would have been paid on the shares of Common Stock covered by
such Incentive Award had such covered Common Stock been issued and
outstanding on the dividend record date, as described in Article XI.
2.12 "Employee" - Any employee (including officers) of the Company or a
Subsidiary.
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2.13 "Exchange Act" - The Securities Exchange Act of 1934, as amended.
2.14 "Fair Market Value" - The average of the reported high and low sales
price of the Common Stock (rounded up to the nearest one-eighth of a dollar)
on the date on which Fair Market Value is to be determined (or if there was
no reported sale on such date, the next preceding date on which any reported
sale occurred) on the principal exchange or in such other principal market on
which the Common Stock is trading.
2.15 "Incentive Award" - Any award granted under this Plan.
2.16 "Incentive Stock Option" - A Stock Option intended to satisfy the
requirements of Section 422(b) of the Code.
2.17 "Nonqualified Stock Option" - A Stock Option other than an Incentive
Stock Option, a Deferred Compensation Stock Option, or a Contingent Stock
Option.
2.18 "Participant" - A key Employee selected by the Committee to receive an
Incentive Award.
2.19 "Performance Period" - A period of one or more fiscal years of the
Company, beginning with the fiscal year in which Performance Units,
Performance Shares or other performance-based long-term awards are granted,
over which performance is measured, for the purpose of determining the
payment value of any such Incentive Award.
2.20 "Performance Unit" or "Performance Share" - An Incentive Award
representing a contingent right to receive cash or shares of Common Stock
(which may be Restricted Stock) at the end of a Performance Period and which,
in the case of Performance Shares, is denominated in Common Stock, and, in
the case of Performance Units, is denominated in cash values.
2.21 "Restricted Stock" - Shares of Common Stock issued or transferred
pursuant to Article IX.
2.22 "Retirement" - Employment separation on account of early, normal, or
late retirement, as described in the Oryx Energy Company Retirement Plan or
any successor plan thereto.
2.23 "Rule 16b-3" - Rule 16b-3 shall have the meaning assigned in Section
4.1
2.24 "Securities Act" - The Securities Act of 1933, as amended.
2.25 "Stock Appreciation Right" - The rights specified in Article VIII.
2.26 "Stock Option" - An award of a right or contingent right to purchase
Common Stock pursuant to Article VII.
2.27 "Subsidiary" - A "subsidiary corporation" as defined in Section 424(f)
of the Code that is a subsidiary of the Company.
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ARTICLE III
SHARES OF COMMON STOCK SUBJECT TO THE PLAN
3.1 COMMON STOCK AUTHORIZED. Subject to the provisions of this Article and
Article XIII, the total aggregate number of shares of Common Stock that may
be issued, transferred, or exercised pursuant to Incentive Awards shall not
exceed 3,000,000 shares.
3.2 LIMITATION OF SHARES. For purposes of the limitations specified in
Section 3.1, the following principles apply: (a) a decrease in the number of
shares that thereafter may be issued or transferred for purpose of Section
3.1 shall result from (i) the delivery of shares of Common Stock upon
exercise of a Stock Option or Stock Appreciation Right in any manner and (ii)
upon the award of Restricted Stock and (iii) the delivery of shares of Common
Stock in settlement of Dividend Equivalents or Performance Units or
Performance Shares; (b) shares of Common Stock with respect to which Stock
Options and Stock Appreciation Rights expire, are cancelled without being
exercised, or are otherwise terminated may be regranted under this Plan; and
(c) if any shares of Common Stock related to an Incentive Award are not
issued or, for any reason, cease to be issuable or are forfeited such shares
of Common Stock shall no longer be charged against the limitation provided
for in Section 3.1 and shall be available again for the grant of Incentive
Awards.
3.3 SHARES AVAILABLE. At the discretion of the Board or the Committee, the
shares of Common Stock to be delivered under this Plan shall be made
available either from authorized and unissued shares of Common Stock or
shares of Common Stock held in the treasury of the Company, or both.
3.4 INCENTIVE AWARD ADJUSTMENTS. Subject to the limitations set forth in
Article XV, the Committee may make any adjustment in the exercise price or
the number of shares subject to, or the terms of, a Nonqualified Stock
Option, Deferred Compensation Stock Option, Contingent Stock Option, Stock
Appreciation Right, or other stock-based grant pursuant to Section 6.1. Such
adjustment shall be made by amending, substituting or cancelling and
regranting an outstanding Nonqualified Stock Option, Deferred Compensation
Stock Option, Contingent Stock Option, Stock Appreciation Right, or other
stock-based grant pursuant to Section 6.1 with the inclusion of terms and
conditions that may differ from the terms and conditions of the original
Nonqualified Stock Option, Deferred Compensation Stock Option, Contingent
Stock Option, Stock Appreciation Right, or other stock-based grant pursuant
to Section 6.1. If such action is effected by amendment, the effective date
of such amendment shall be the date of the original grant.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.1 COMMITTEE. This Plan shall be administered by the Committee, which
shall consist of three or more directors of the Company, all of whom are
"disinterested persons," as such term is defined under the rules and
regulations adopted, from time to time, by the Securities and Exchange
Commission pursuant to Section 16(b) of the Exchange Act, including
specifically but without limitation, Rule 16b-3 or any successor rule
thereto. The Committee may, in its discretion, delegate its duties under
this Plan to such agents as it may appoint from time to time, provided that
the Committee may not delegate its duties with respect to making Incentive
Awards to Participants subject to Section 16(b) of the Exchange Act. The
members of the Committee shall serve at the pleasure of the Board, which
shall have the power, at any time and from time to time, to remove members
from the Committee or to add members thereto. Vacancies on the Committee,
however caused, shall be filled by action of the Board.
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4.2 POWERS. The Committee has discretionary authority to determine the key
Employees to whom, and the time or times at which, Incentive Awards shall be
granted. The Committee also has authority to determine the amount of shares
of Common Stock that shall be subject to each Incentive Award, and the terms,
conditions, and limitations of each Incentive Award, subject to the express
provisions of this Plan. The Committee shall have the discretion to
interpret this Plan and to make all other determinations necessary for Plan
administration. The Committee has authority to prescribe, amend, and rescind
any rules and regulations relating to this Plan, subject to the express
provisions of this Plan. All Committee interpretations, determinations, and
actions shall be in the sole discretion of the Committee and shall be binding
on all parties. The Committee may correct any defect or supply any omission
or reconcile any inconsistency in this Plan or in any Agreement in the manner
and to the extent it shall deem expedient to carry it into effect, and it
shall be the sole and final judge of such expediency.
4.3 INCENTIVE AWARD TERMS. Incentive Awards shall be evidenced by an
Agreement and may include any terms and conditions consistent with this Plan,
as the Committee may determine.
4.4 NO LIABILITY. No member of the Board or the Committee shall be liable
for any action or determination made in good faith by the Board or the
Committee with respect to this Plan or any Incentive Award under this Plan.
ARTICLE V
ELIGIBILITY
5.1 PARTICIPATION. Participants shall be selected from the key Employees of
the Company and its Subsidiaries. Such designation may be by individual or
by class.
5.2 INCENTIVE STOCK OPTION ELIGIBILITY. No person shall be eligible for the
grant of an Incentive Stock Option who owns (within the meaning of Section
422(b) of the Code), or would own immediately before the grant of such
Incentive Stock Option, directly or indirectly, stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary. This restriction shall not apply if at the time
such Incentive Stock Option is granted, the Incentive Stock Option exercise
price is at least 110 percent of Fair Market Value and the Incentive Stock
Option is not, by its terms, exercisable after the expiration of five years
from the Date of Grant.
5.3 NO BOARD PARTICIPATION. In no event may any member of the Board who is
not an officer or other Employee of the Company or a Subsidiary be granted an
Incentive Award under this Plan.
ARTICLE VI
FORMS OF INCENTIVE AWARDS
6.1 INCENTIVE AWARD ELIGIBILITY. The forms of Incentive Awards under this
Plan are Stock Options as described in Article VII, Stock Appreciation Rights
as described in Article VIII, Restricted Stock as described in Article IX,
Performance Units or Performance Shares as described in Article X, Dividend
Equivalents as described in Article XI, and other stock-based grants as
described in this Article VI. The Committee may, in its discretion, permit
holders of Incentive Awards under this Plan to surrender outstanding
Incentive Awards in order to exercise or realize the rights under other
Incentive Awards, or in exchange for the grant of new Incentive Awards or
require holders of Incentive Awards to surrender outstanding Incentive Awards
as a condition precedent to the grant of new Incentive Awards. The Committee
may grant, from time to time, to any eligible Employee other stock-based
grants. Such other
4
<PAGE>
stock-based grants will either be issued (i) for no consideration other than
services actually rendered (in the case of authorized and unissued shares) or
to be rendered, (ii) for consideration equal to the amount (such as the par
value of such shares) required by applicable law to be received by the
Company in order to assure compliance with applicable state law, or (iii) for
consideration (other than services rendered or to be rendered) equal to or
greater than one-half of the Fair Market Value of the Common Stock covered by
such grant on the Date of Grant. The Committee may specify such criteria or
periods or goals for payment to the Participant as it shall determine, and
the extent to which such criteria or periods or goals have been met shall be
conclusively determined by the Committee. Other stock-based grants may be
paid in shares of Common Stock or other consideration related to such shares
or in a single payment or in installments as specified by the grant and may
be payable on such dates as determined by the Committee and specified by the
grant. The other terms and conditions of other stock-based grants shall be
determined by the Committee.
ARTICLE VII
STOCK OPTIONS
7.1 EXERCISE PRICE. The exercise price of Common Stock under each Stock
Option shall be determined by the Committee at the time of grant; provided
that, the exercise price of Common Stock under a Stock Option other than a
Deferred Compensation Stock Option or a Contingent Stock Option shall be at
least equal to 100 percent of the Fair Market Value of the Common Stock on
the Date of Grant, provided further that the exercise price of Common Stock
under a Deferred Compensation Stock Option and a Contingent Stock Option
shall be determined as set forth in Section 6.1 with respect to other
stock-based grants.
7.2 TERM. Stock Options may be exercised as determined by the Committee,
provided that Incentive Stock Options may in no event be exercised later than
10 years from the Date of Grant or granted later than 10 years from the date
of adoption of this Plan. During the Participant's lifetime, only the
Participant may exercise an Incentive Stock Option. The Committee may amend
the terms of an Incentive Stock Option at any time to include provisions that
have the effect of changing such Incentive Stock Option to a Nonqualified
Stock Option, or vice-versa (to the extent any such change is permitted by
applicable law).
7.3 METHOD OF EXERCISE. Upon the exercise of a Stock Option, the exercise
price shall be payable in full in cash or an equivalent acceptable to the
Committee. No fractional shares shall be issued pursuant to the exercise of
a Stock Option, and no payment shall be made in lieu of fractional shares.
At the discretion of the Committee and provided such payment can be effected
without causing the Participant to incur liability under Section 16(b) of the
Exchange Act, the exercise price may be paid by assigning and delivering to
the Company shares of Common Stock or a combination of cash and such shares
equal in value to the exercise price. Any shares so assigned and delivered to
the Company in payment or partial payment of the exercise price shall be
valued at Fair Market Value on the exercise date.
In addition, at the request of the Participant and to the extent permitted
by applicable law, the Company in its discretion may selectively approve
arrangements with a brokerage firm under which such brokerage firm, on behalf
of the Participant, shall pay to the Company the exercise price of the Stock
Options being exercised, and the Company, pursuant to an irrevocable notice
from the Participant, shall promptly deliver the shares being purchased to
such firm.
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At the discretion of the Committee, the Participant may be granted by
Agreement, Stock Options to purchase an additional number of shares equal to
the number of shares used by the Participant to pay all or a portion of the
exercise price of other Stock Options or the tax required to be withheld
pursuant to the exercise of such Stock Options, or such additional shares of
Common Stock as shall be authorized by the Committee.
7.4 LIMITATION ON INCENTIVE STOCK OPTIONS. With respect to Incentive Stock
Options, the aggregate Fair Market Value (determined at the Date of Grant) of
the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year
(under all stock option plans of the Company and its Subsidiaries) shall not
exceed $100,000, or such other amount as may be prescribed under the Code or
applicable regulations or rulings from time to time.
7.5 DEFERRED COMPENSATION STOCK OPTIONS. A Deferred Compensation Stock
Option is intended to provide a means by which compensation payments can be
deferred to future dates. The Committee shall determine the amount of any
compensation payments to be deferred. The number of shares of Common Stock
subject to a Deferred Compensation Stock Option shall be determined by the
Committee, in accordance with the following formula:
Amount of Compensation to be Deferred
-------------------------------------
Fair Market Value on Date of Grant = Number of Shares
minus Exercise Price of Options
Amounts of compensation so deferred may include amounts earned under
Incentive Awards or under any other compensation plan, program, or
arrangement of the Company, as determined by the Committee.
A Deferred Compensation Stock Option shall be granted only if the Committee
has reasonably determined that the recipient of such Deferred Compensation
Stock Option will not be deemed at the Date of Grant to be in receipt of the
amount of income being deferred for purposes of the Code. The shares of
Common Stock purchasable under an Agreement evidencing the grant of a
Deferred Compensation Stock Option shall be in lieu of the compensation so
deferred unless otherwise specified by the Committee.
7.6 CONTINGENT STOCK OPTIONS. In connection with the grant of an Incentive
Award, the exercise of which is dependent upon satisfaction of performance
criteria, the Committee may award a Contingent Stock Option that is to be
exercisable only if the conditions under which such related Incentive Award
becomes payable are not achieved. The number of Contingent Stock Options
granted may be more than or less than or equal to the number of shares
subject to such related Incentive Award. The Contingent Stock Options shall
remain in effect as long as the related Incentive Award remains in effect and
shall be subject to the same provisions for termination or acceleration. If
the conditions for paying the Incentive Awards are not achieved, the
Incentive Award shall be cancelled and the Contingent Stock Options shall be
exercisable in accordance with the terms prescribed by the Committee.
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ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 GRANT. The grant of Stock Appreciation Rights under this Plan shall be
subject to the terms and conditions of this Article VIII and shall contain
such additional terms and conditions, not inconsistent with the express
provisions of this Plan, as the Committee shall deem desirable. A Stock
Appreciation Right is an Incentive Award entitling a Participant to receive
an amount equal to (or if the Committee shall determine at the time of grant,
less than) the excess of the Fair Market Value of a share of Common Stock on
the date of exercise of the Stock Appreciation Right over the Fair Market
Value of a share of Common Stock on the Date of Grant of such Stock
Appreciation Right, or such other price as set by the Committee, multiplied
by the number of shares of Common Stock with respect to which the Stock
Appreciation Right shall have been exercised. A Stock Appreciation Right may
be granted to a Participant in connection with a Stock Option, whether in
tandem or not, and either at the time of grant or at any time during the term
of the Stock Option, or without relation to a Stock Option.
8.2 ALTERNATE APPRECIATION RIGHTS. An Alternate Appreciation Right is a
Stock Appreciation Right granted in tandem with a Stock Option that requires
the Participant, upon exercise, to surrender such Stock Option with respect
to the number of shares as to which such Stock Appreciation Right is
exercised, and shall entitle the Participant to receive payment of an amount
computed pursuant to Section 8.1. Such Stock Option shall then cease to be
exercisable to the extent surrendered.
8.3 LIMITATION ON EXERCISE. Subject to Article XIII, a Stock Appreciation
Right granted in connection with a Stock Option shall be exercisable at such
time or times and only to the extent that the related Stock Option is
exercisable, and shall not be transferable except to the extent that such
related Stock Option is transferable. The Committee may also provide that a
Stock Appreciation Right shall be automatically exercised on one or more
specified dates.
8.4 PAYMENT. Payment of the amount determined under Section 8.1 may, in the
discretion of the Committee, be made solely in whole shares of Common Stock
valued at Fair Market Value on the date of exercise of the Stock Appreciation
Right or, alternatively, solely in cash or a combination of cash and Common
Stock, or deferred through the grant of a Deferred Compensation Stock Option.
Exercise of a Stock Appreciation Right for cash shall be made only during
such periods as may be permissible without causing the Participant to incur
liability under Section 16(b) of the Exchange Act. If the Committee decides
to make full payment in shares of Common Stock and the amount payable results
in a fractional share, payment for the fractional share shall be made in
cash.
8.5 LIMITED RIGHTS. A Limited Right is a Stock Appreciation Right that is
effective only upon a Change in Control (as defined in Section 13.2) and is
payable only in cash. The amount of payment to which any grantee of such a
Limited Right shall be entitled upon exercise shall be equal to the
difference between the exercise price per share of any Common Stock covered
by a Stock Option in connection with, whether or not in tandem, such Limited
Right and the "market price" of a share of Common Stock. For purposes of
this Section 8.5, the term "market price" shall mean the greater of (i) the
highest price per share of Common Stock paid in connection with the Change in
Control and (ii) the highest price per share of Common Stock reflected in the
NYSE Transactions Report during the sixty-day period prior to the Change in
Control. If the Limited Rights are exercised, the tandem Stock Options and
any tandem Stock Appreciation Rights other than under this Section 8.5 shall
cease to be exercisable to the extent of the Common Stock with respect to
which such Limited Rights are exercised.
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ARTICLE IX
RESTRICTED STOCK
9.1 GRANT. Shares of Restricted Stock may be awarded under this Plan on
such terms and conditions and with such restrictions as the Committee may
from time to time approve. If a person is awarded shares of Restricted
Stock, the person shall be the record owner of such shares and shall have all
the rights of a stockholder with respect to such shares (unless the escrow
agreement, if any, referred to in Section 9.2 provides otherwise), including
the right to vote and to receive dividends or other distributions with
respect thereto. Such Restricted Stock shall be awarded for no cash or such
cash as the Committee shall determine; provided, however, that unless the
shares awarded as Restricted Stock are shares that have been reacquired by
the Company as treasury shares, Restricted Stock shall be awarded only for
services actually rendered, as determined by the Committee. Restricted Stock
awards may be granted alone, in addition to, or in tandem with, other
Incentive Awards. Subject to the terms of this Plan, the Committee shall
determine the number of shares of Restricted Stock to be awarded to a
Participant.
9.2 RESTRICTION CONDITIONS. All shares of Restricted Stock awarded pursuant
to this Plan shall be subject to the following conditions:
(a) The shares may not be the subject of any Disposition (other than by
will or the laws of descent and distribution) until the restrictions are
removed or expire. Any attempted Disposition in violation of this
provision shall be void and ineffective for all purposes.
(b) Each Participant receiving a Restricted Stock award shall be issued
a stock certificate in respect of such shares of Common Stock. Such
certificate shall be registered in the name of such Participant, and each
such certificate shall bear a legend making appropriate reference to the
restrictions imposed.
(c) The Committee may require, as a condition to any award of Restricted
Stock, one or more of the following: that the Company retain physical
custody of the certificate or certificates representing Restricted Stock
during the restriction period; and that the Participant enter into an
escrow agreement providing that the certificate or certificates
representing Restricted Stock shall remain in the physical custody of an
escrow holder until all restrictions are removed or expire, and/or that
the Participant deliver a stock power duly endorsed in blank relating to
the Restricted Stock. The Company may issue shares of Restricted Stock
subject to stop transfer restrictions or may issue such shares subject
only to the restrictive legend described in this Section.
(d) If for any reason, the restrictions imposed by the Committee upon
Restricted Stock are not satisfied at the end of the restriction period,
for any reason, any Restricted Stock remaining subject to such
restrictions shall thereupon be forfeited by the Participant and
transferred to and reacquired by the Company at no cost to the Company.
(e) The Committee may impose other conditions on any shares of Restricted
Stock awarded pursuant to this Plan as it may deem advisable, including,
without limitation, restrictions deemed necessary or advisable by the
Committee to ensure compliance with the Securities Act, the requirements
of any securities exchange upon which such shares or shares of the same
class are then listed, and any state securities law applicable to such
shares.
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9.3 LAPSE. The restrictions imposed by the Committee pursuant to this
Article IX upon Restricted Stock awards shall lapse as determined by the
Committee, subject to the provisions of Articles XII and XIII. Each
Restricted Stock award may have a different restriction period, in the
discretion of the Committee. The Committee may, in its discretion,
prospectively change the restriction period applicable to a particular
Restricted Stock award.
ARTICLE X
PERFORMANCE UNITS OR PERFORMANCE SHARES
10.1 GRANTS. The Committee may grant Performance Units or Performance
Shares on the basis of either Company performance criteria or continued
employment with the Company by a Participant. The Performance Periods for
separate grants may run concurrently. For each Performance Period the
Committee shall establish the number of Performance Units or Performance
Shares and the contingent value of any Performance Unit or Performance Shares
relating thereto.
10.2 COMPANY PERFORMANCE. At the beginning of each Performance Period for
grants based on Company performance, the Committee shall: (i) establish for
such Performance Period specific financial or other performance objectives
which may be absolute or relative to performance, the industry or a group of
peer companies as the Committee believes are relevant to the Company's
overall business objectives; (ii) determine the value of a Performance Unit
or the number of Performance Shares relative to performance objectives; and
(iii) notify each Participant in writing of the terms and conditions of the
grant.
If the Committee determines in its sole discretion that the established
performance measures or objectives are no longer suitable to Company
objectives because of a change in the Company's business, operations,
corporate structure, capital structure, or other conditions the Committee
deems to be appropriate, the Committee may modify the performance measures
and objectives as considered appropriate.
If minimum performance is not achieved or exceeded for a Performance Period,
no payment shall be made and all contingent rights shall cease. If minimum
performance is achieved or exceeded, the value of a Performance Unit or
Performance Share shall be based on the degree to which actual performance
exceeded the preestablished minimum performance standards, as determined by
the Committee hereunder. The amount of payment shall be determined by
multiplying the number of Performance Units or Performance Shares granted at
the beginning of the Performance Period times the final Performance Unit or
Performance Share value.
10.3 CONTINUED EMPLOYMENT. At the beginning of each Performance Period for
grants based on continued employment with the Company, the Committee shall:
(i) establish the duration of the Performance Period, which shall be the
period of time during which the Participant must remain employed by the
Company in order to receive payment; (ii) determine the value of a
Performance Unit or the number of Performance Shares relative to such
continued employment; and (iii) notify each Participant in writing of the
terms and conditions of the grant.
Subject to Articles XII and XIII hereof, the rights of a Participant under an
employment-based grant of Performance Units or Performance Shares shall
automatically terminate upon termination of the Participant's employment with
the Company prior to the end of the applicable Performance Period, and in
that event the Participant shall not be entitled to receive any payment in
respect thereof.
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10.4 PAYMENTS. In the discretion of the Committee, payments shall be made
in cash or Common Stock or a combination thereof following the close of the
applicable Performance Period, in such manner as may be permissible without
causing the Participant to incur liability under Section 16(b) of the
Exchange Act.
ARTICLE XI
DIVIDEND EQUIVALENTS
11.1 GRANT. A recipient of an Incentive Award (other than Restricted Stock)
may also be granted at no additional cost Dividend Equivalents based on the
dividends declared on the Common Stock on record dates during the period
between the Date of Grant and the date of exercise or payment, as applicable.
Such Dividend Equivalents shall be converted to additional shares of Common
Stock as follows:
(Number of shares or units under the
Number of Dividend = Incentive Award) X (Dividend per share)
Equivalent Shares -------------------------------------------
Fair Market Value per share of Common
Stock at corresponding dividend record date
The Dividend Equivalents earned with respect to an Incentive Award shall be
distributed to the Participant (or his successor in interest) in the form of
shares of Common Stock or units denominated in Common Stock, or an equivalent
amount of cash, as the Committee shall determine, and at such time or times
as the Committee shall determine. Dividend Equivalents shall be computed, as
of each dividend record date, both with respect to the number of shares or
units under the Incentive Award and with respect to the number of Dividend
Equivalent shares or Dividend Equivalent units previously earned by the
Participant (or his successor in interest) and not issued during the period
prior to the dividend record date.
ARTICLE XII
FORFEITURE AND EXPIRATION OF INCENTIVE AWARDS
12.1 TERMINATION. Subject to the express provisions of this Plan and the
terms of any applicable Agreement, the Committee, in its discretion, may
provide for the forfeiture or continuation of any Incentive Award for such
period and upon such terms and conditions as are determined by the Committee
in the event that a Participant ceases to be an employee. In the absence of
Committee action or contrary provisions in an Agreement, the following rules
shall apply:
(a) if an Employee ceases to be an Employee for any reason, the Dividend
Equivalents and/or other stock-based grants pursuant to Section 6.1 held
by such Participant shall terminate and be forfeited as of the date of
employment separation;
(b) if a holder of Restricted Stock or Performance Shares or Performance
Units ceases to be an Employee because of Retirement, death, or permanent
and total disability, such holder shall be entitled to receive his
Restricted Stock free of restriction or shares of Common Stock or cash
subject to such Performance Shares or Performance Units upon the
satisfaction of the applicable criteria, after adjusting the Restricted
Stock, Performance Shares or Performance Units by multiplying the number
of shares subject to the Restricted Stock, Performance Shares or
Performance Units by a fraction, the numerator of which shall be the
number of full and partial calendar months between the date of the
Restricted Stock, Performance Share or Performance Unit award and the
date of employment separation, and the denominator of which shall be the
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number of full and partial calendar months from the date of such award to
the end of the applicable restriction period; in the event of separation
of employment for any other reason, the grant of Performance Shares or
Performance Units shall terminate and be forfeited and the Restricted
Stock shall be forfeited by such person and transferred to, and
reacquired by, the Company or a Subsidiary at no cost to the Company or
the Subsidiary;
(c) with respect to Stock Options, in the event of Retirement or
permanent and total disability, Stock Options will become fully vested,
but no Stock Options may be exercised after 36 months (12 months in the
case of Incentive Stock Options) following the date of Retirement or
permanent and total disability; in the event of death, Stock Options
exercisable at the time of death by the Participant may be exercised by
the estate or beneficiary of such Participant until the expiration of the
earlier of the remaining term of such Stock Options or one year from the
date of death; and, in the event of separation of employment for any
other reason, the Stock Options shall continue to vest according to the
original schedule, but shall terminate and be forfeited after six months
from the date of separation of employment; and
(d) with respect to Stock Appreciation Rights, in the event of Retirement
or permanent and total disability, the Stock Appreciation Rights shall
continue in effect for six months following separation of employment, and
such Stock Appreciation Rights may be exercised during such six-month
period; in the event of death or separation of employment for any other
reason, the Stock Appreciation Rights shall terminate; provided that,
Limited Rights pursuant to Section 8.5 may be exercised in accordance
with their terms by the holder thereof who separated from employment
following a Change in Control, without respect to the separation of
employment of such holder.
12.2 LEAVE OF ABSENCE. With respect to an Incentive Award, the Committee
may, in its sole discretion, determine that any Participant who is on leave
of absence for any reason shall be considered to still be in the employ of
the Company, provided that rights to such Incentive Award during a leave of
absence shall be limited to the extent to which such rights were earned or
vested when such leave of absence began.
ARTICLE XIII
ADJUSTMENT PROVISIONS
13.1 SHARE ADJUSTMENTS. If the number of outstanding shares of Common Stock
are increased, decreased, or exchanged for a different number or kind of
shares or other securities, or if additional, new, or different shares or
other securities are distributed with respect to such shares of Common Stock
or other securities through merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other distribution with respect to such shares of Common
Stock or other securities, an appropriate adjustment in order to preserve the
benefits or potential benefits intended to be made available to the
Participants may be made, in the discretion of the Committee, in all or any
of the following: (i) the maximum number and kind of shares provided in
Section 3.1; (ii) the number and kind of shares or other securities subject
to then outstanding Incentive Awards; and (iii) the price for each share or
other unit of any other securities subject to then outstanding Incentive
Awards. The Committee may also make any other adjustments, or take such
action, as the Committee, in its discretion, deems appropriate in order to
preserve the benefits or potential benefits intended to be made available to
the Participants. Any fractional share resulting from such adjustment may be
eliminated.
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13.2 CORPORATE CHANGES. Subject to Article XV, upon (i) the dissolution or
liquidation of the Company; (ii) a reorganization, merger, or consolidation
(other than a merger or consolidation effecting a reincorporation of the
Company in another state or any other merger or consolidation in which the
shareholders of the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are substantially
identical to the shareholders of the Company and their proportionate
interests therein immediately prior to the merger or consolidation) of the
Company with one or more corporations, following which the Company is not the
surviving corporation (or survives only as a subsidiary of another
corporation in a transaction in which the shareholders of the parent of the
Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the shareholders of the
Company and their proportionate interests therein immediately prior to the
transaction); (iii) the sale of all or substantially all of the assets of the
Company; or (iv) the occurrence of a Change in Control, subject to the terms
of any applicable Agreement, the Committee serving prior to the date of the
applicable event may, to the extent permitted in Section 3.1 of this Plan, in
its discretion, without obtaining shareholder approval, take any one or more
of the following actions with respect to any Participant:
(a) Accelerate the exercise dates of any or all outstanding Incentive
Awards;
(b) Accelerate the restriction lapse period of any Restricted Stock
subject to restrictions;
(c) Grant Stock Appreciation Rights to holders of outstanding Stock
Options;
(d) Pay cash to any or all holders of Stock Options in exchange for the
cancellation of their outstanding Stock Options;
(e) Make payment for any outstanding Performance Units or Performance
Shares based on such amounts as the Committee may determine;
(f) Grant new Incentive Awards to any Participants;
(g) Grant additional Dividend Equivalents; or
(h) Make any other adjustments or amendments to outstanding Incentive
Awards or determine that there shall be substitution of new Incentive
Awards by such successor employer corporation or a parent or subsidiary
company thereof, with appropriate adjustments as to the number and
kind of shares or units subject to such awards and prices.
A "Change in Control" shall be deemed to have occurred for purposes of this
Plan, if (a) individuals who were directors of the Company immediately prior
to a "Control Transaction" shall cease, within one year of such Control
Transaction, to constitute a majority of the Board of Directors of any
successor to the Company or to a company which has acquired all or
substantially all of its assets or (b) any entity, person, or "Group"
acquires shares of the Company in a transaction or series of transactions
that result in such entity, person, or Group directly or indirectly owning
beneficially 50 percent or more of the outstanding shares of Common Stock of
the Company. As used in this Section 13.2, the term "Control Transaction"
shall mean (a) any tender offer for or acquisition of capital stock of the
Company, (b) any merger, consolidation, or sale of all or substantially all
of the assets of the Company, (c) any contested election of directors of the
Company, or (d) any combination of the foregoing that results in a change in
voting power sufficient to elect a majority of the Board. As used in this
Section 13.2, the term "Group" shall mean persons who act "in concert" as
described in Sections 13(d)(3) and/or 14(d)(2) of the Exchange Act.
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13.3 BINDING DETERMINATION. Adjustments under Sections 13.1 and 13.2 shall
be made by the Committee, and its determination as to what adjustments shall
be made and the extent thereof shall be final, binding, and conclusive.
ARTICLE XIV
GENERAL PROVISIONS
14.1 NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any instrument
executed pursuant to this Plan shall confer upon any Participant any right to
continue in the employ of the Company or a Subsidiary or affect the Company's
or a Subsidiary's right to terminate the employment of any Participant at any
time with or without cause.
14.2 SECURITIES REQUIREMENTS. No shares of Common Stock shall be issued or
transferred pursuant to an Incentive Award unless all applicable requirements
imposed by federal and state laws, regulatory agencies, and securities
exchanges upon which the Common Stock may be listed have been fully complied
with. As a condition precedent to the issuance of shares pursuant to the
grant or exercise of an Incentive Award, the Company may require the
Participant to take any reasonable action to meet such requirements.
14.3 NO RIGHT TO STOCK. No Participant and no beneficiary or other person
claiming under or through such Participant shall have any right, title, or
interest in any shares of Common Stock allocated or reserved under this Plan
or subject to any Incentive Award except as to such shares of Common Stock,
if any, that have been issued or transferred to such Participant.
14.4 WITHHOLDING. The Company or a Subsidiary, as appropriate, shall have
the right to deduct from all Incentive Awards paid in cash any federal,
state, or local taxes as required by law to be withheld with respect to such
cash payments. In the case of Incentive Awards paid in Common Stock, the
Participant or other person receiving such Common Stock may be required to
pay to the Company or a Subsidiary, as appropriate, the amount of any such
taxes which the Company or Subsidiary is required to withhold with respect to
such Common Stock. Also, at the discretion of the Committee and provided
such withholding can be effected without causing the participant to incur
liability under Section 16(b) of the Exchange Act, the Participant may (i)
direct the Company or Subsidiary to withhold from the shares of Common Stock
to be issued or transferred to the Participant the number of shares necessary
to satisfy the Company's or Subsidiary's obligation to withhold taxes, such
determination to be based on the shares' Fair Market Value as of the date on
which tax withholding is to be made, (ii) deliver sufficient shares of Common
Stock (based upon the Fair Market Value at the date of withholding) to
satisfy the withholding obligations, or (iii) deliver sufficient cash to
satisfy the withholding obligations. Participants who elect to use such a
stock withholding feature must make the election at the time and in the
manner prescribed by the Committee.
14.5 NO DISPOSITION. No Incentive Award and no right under this Plan,
contingent or otherwise, may be the subject of any Disposition (excluding
shares of Common Stock with respect to which all restrictions have lapsed),
other than by will or the laws of descent or distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title T of the
Employee Retirement Income Security Act, or the rules thereunder. Any
attempted Disposition in violation of this provision shall be void and
ineffective for all purposes.
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14.6 SEVERABILITY; CONSTRUCTION. If any provision of this Plan is held to
be illegal or invalid for any reason, then the illegality or invalidity shall
not affect the remaining provisions hereof, but such provision shall be fully
severable and this Plan shall be construed and enforced as if the illegal or
invalid provision had never been included herein. Headings and subheadings
are for convenience only and not to be conclusive with respect to
construction of this Plan.
14.7 GOVERNING LAW. All questions arising with respect to the provisions of
this Plan shall be determined by application of the laws of the State of
Delaware, except as may be required by applicable federal law.
14.8 OTHER DEFERRALS. The Committee may permit selected Participants to
elect to defer payment of Incentive Awards other than Deferred Compensation
Stock Options in accordance with procedures established by the Committee
including, without limitation, procedures intended to defer taxation on such
deferrals until receipt (including procedures designed to avoid incurrence of
liability under Section 16(b) of the Exchange Act). Any deferred payment,
whether elected by the Participant or specified by an Agreement or by the
Committee may require forfeiture in accordance with stated events, as
determined by the Committee. The Committee may also establish rules and
procedures for crediting interest on deferred cash payments and Dividend
Equivalents for deferred payments denominated in Common Stock or units based
on Common Stock values.
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENTS; SUSPENSION; TERMINATION. The Board may at any time amend,
suspend (and if suspended, may reinstate) or terminate this Plan; provided,
however, that after the stockholders have approved this Plan in accordance
with Section 16.1, the Board may not, without approval of the stockholders of
the Company, amend this Plan so as to (a) increase the number of shares of
Common Stock subject to this Plan except as permitted in Article XIII, (b)
reduce the option price for shares of Common Stock covered by Stock Options
granted hereunder below the applicable price specified in Section 5.2 or
Article VI or VII of this Plan or (c) accelerate the date when Incentive
Awards can first be granted under this Plan as provided in Section 16.2; and
provided further, that the Board may not modify, impair or cancel any
outstanding Incentive Award without the consent of the affected Participant.
ARTICLE XVI
DATE OF PLAN ADOPTION AND EFFECTIVE DATE FOR INCENTIVE AWARDS
16.1 DATE OF PLAN ADOPTION. This Plan has been adopted by the Board on
February 7, 1991, subject to stockholder approval. If the requisite
stockholder approval is not obtained, then the Plan shall become null and
void and of no further force or effect. This Plan shall continue in effect
with respect to Incentive Awards granted before termination of this Plan and
until such Incentive Awards have been settled, terminated or forfeited.
16.2 EFFECTIVE DATE FOR INCENTIVE AWARDS. Notwithstanding anything
contained in this Plan to the contrary, no Incentive Award shall be granted
under this Plan prior to January 1, 1992.
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EXHIBIT 10.14
ORYX ENERGY COMPANY
AMENDED AND RESTATED
SPECIAL EXECUTIVE SEVERANCE PLAN
September 1, 1994
<PAGE>
ORYX ENERGY COMPANY
SPECIAL EXECUTIVE SEVERANCE PLAN
This Special Executive Severance Plan (the "Plan") provides
severance benefits to designated executive officers in the event of
termination of their employment after certain corporate changes
defined herein ("Corporate Changes") to Oryx Energy Company (the
"Company"). The purpose of the Plan is to protect the Company and
its shareholders by relieving these executives of the personal
concern over financial security that often develops as a result of
Corporate Changes. Thus, the Plan is intended to minimize
distractions from operating responsibilities, lessen defections to
other companies, create a more positive business environment, and
permit the executives to act in the best interests of the Company
and its shareholders and with impartiality.
The Compensation Committee of the Board of Directors (the
"Compensation Committee") hereby grants to the Chief Executive
Officer the authority to designate those officers who will
participate in the Plan, provided, however, that the Chief
Executive Officer may not designate himself as a participant in the
Plan. Benefits under the Plan will be provided to the designated
officers through individual Executive Severance Agreements
("Agreements"). The Compensation Committee hereby delegates to the
Chief Executive Officer the authority to approve on behalf of the
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Corporation Agreements containing the following terms, and
thereafter to extend or terminate such Agreements.
1. TYPE OF AGREEMENT:
The agreement shall provide for the benefits specified herein
to be paid or made available to the officer upon termination
of employment with the Company within 2 years of a Corporate
Change.
The officer shall not be entitled to benefits under the Plan
if such termination is due to the officer's death, disability
or discharge by the Company for JUST CAUSE. However, if
termination is due to the officer's death or disability, the
officer shall be entitled to all benefits under the provisions
of the Company's employee and executive benefit and
compensation plans in which the officer is a participant just
prior to the Corporate Change or of those programs in
existence at the time of death or disability, whichever is
more favorable to the officer. The officer shall be entitled
to the benefits under the Plan upon the officer's voluntary
termination of employment (including the officer's election to
take early retirement under the Oryx Energy Company Retirement
Plan) if such termination is the result of a determination by
the officer that, as a result of the Corporate Change, the
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officer is unable to effectively discharge the officer's
present duties or the duties of the position which the officer
occupied just prior to the Corporate Change.
2. TERM OF AGREEMENT: The initial term of the Agreements shall
be for a period of 2 years from the date thereof. Such term
shall automatically be extended for successive 2-year periods
unless written notice of termination of the Agreement is
provided to the officer by the Company one year prior to the
expiration of any 2-year period.
3. CORPORATE CHANGE: A "Corporate Change" shall be deemed to
have occurred for the purposes of this Plan upon (i) the
dissolution or liquidation of the Company; (ii) a
reorganization, merger, or consolidation of the Company with
one or more corporations (other than a merger or consolidation
effecting a reincorporation of the Company in another state or
any other merger or consolidation in which the shareholders of
the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are
substantially identical to the shareholders of the Company and
their proportionate interests therein immediately prior to the
merger or consolidation); (iii) the sale of all or
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substantially all of the assets of the Company; or (iv) the
occurrence of a Change in Control.
A "Change in Control" shall be deemed to have occurred for
purposes of this Plan if (a) individuals who were directors of
the Company immediately prior to a "Control Transaction" shall
cease, within two years of such Control Transaction, to
constitute a majority of the Board of Directors of the Company
(or of the Board of Directors of any successor to the Company
or to a company which has acquired all or substantially all of
its assets) or (b) any entity, person or "Group" acquires
shares of the Company in a transaction or series of
transactions that result in such entity, person or Group
directly or indirectly owning beneficially 50% or more of the
outstanding shares of Common Stock of the Company.
As used herein, "Control Transaction" shall be (a) any tender
offer for or acquisition of capital stock of the Company, (b)
any merger, consolidation, or sale of all or substantially all
of the assets of the Company, (c) any contested election of
directors of the Company, or (d) any combination of the
foregoing, any one of which results in a change in voting
power sufficient to elect a majority of the Board of Directors
of the Company.
-4-
<PAGE>
As used herein, "Group" shall mean persons who act "in
concert" as described in Sections 13(d)(3) and/or 14(d)(2) of
the Securities Exchange Act of 1934, as amended.
4. BENEFITS:
(a) SEVERANCE COMPENSATION: The officer shall be entitled
to severance compensation in an amount equal to the
officer's Final Annual Compensation multiplied by the
lesser of 3 years or the number of full and fractional
years remaining until the officer reaches age 65.
"Final Annual Compensation" shall be the sum of (1) the
final annualized base salary of the officer, and (2) the
product of such base salary multiplied by the guideline
target incentive (bonus) percentage, all as applicable
to the officer in the salary administration program in
effect either just prior to the Corporate Change or at
the time of termination of employment, whichever is more
favorable to the officer. The severance compensation
paid hereunder shall not be reduced to the extent of any
other compensation which the officer receives or is
entitled to receive from any other employment. The
severance compensation shall be payable in cash from the
general assets of the Company and the Company shall be
-5-
<PAGE>
under no obligation to segregate any assets in
connection with the payment of any such amounts.
(b) EMPLOYEE AND EXECUTIVE BENEFITS:
The officer shall be entitled to all benefits under the
provisions either of the Company's employee and
executive benefit plans in which the officer is a
participant just prior to the Corporate Change,
including but not limited to the Executive Retirement
Plan and the Pension Restoration Plan, or of those plans
in existence at the time of termination of employment,
whichever are more favorable to the officer, in
accordance with the terms and conditions of said plans
and said benefits shall be paid under said plans and not
under this Plan. In addition, for officers who are
less than retirement age on the date of termination of
employment with the Company, the Company will continue
for six months after the date of such termination, at
the Company's expense, long-term disability benefits,
medical and dental insurance, and group term life
insurance as is then in effect under the Company's
employee and executive benefit plans.
-6-
<PAGE>
(c) MISCELLANEOUS BENEFITS: Employment assistance will be
made available to the officer if the officer so desires.
(d) APPLICATION OF SECTION 280G OF THE INTERNAL REVENUE
CODE:
(1) Any other provision of this Plan to the contrary
notwithstanding, if the present value (as defined
herein) of the total amount of payments and
benefits to be paid or provided to the officer
under the Plan which are considered to be
"parachute payments" within the meaning of
Section 280G(b) of the Internal Revenue Code
of 1986, as amended (the "Code"), when added to any
other such "parachute payments" received by the
officer from the Company upon or after a Corporate
Change, whether or not under this Plan, is in
excess of the amount the officer can receive
without causing the officer to be subject to an
excise tax with respect to such amount on account
of Code Section 4999, the Company shall pay to the
officer an additional amount (hereinafter referred
to as the "Excise Tax Premium"). The Excise Tax
Premium shall be equal to the excise tax determined
under Code Sections 280G and 4999 attributable to
the total amount of payments and benefits to be
-7-
<PAGE>
paid or provided to the officer under this Plan and
any other "parachute payments" received by the
officer from the Company upon or after a Corporate
Change. The excise Tax Premium shall include any
amount attributable to excise tax on the Excise Tax
Premium. The Company shall also pay to the officer
an additional amount hereinafter referred to as the
"Income Tax Premium" equal to all Federal, State
and local income taxes incurred because of the
Excise Tax Premiums. The officer shall be deemed
to pay income taxes on the date of termination of
employment at the highest marginal rate of income
taxation in effect in the officer's taxing
jurisdiction. The Income Tax Premium shall include
any amount attributable to income tax on the Income
Tax Premium.
(2) Not later than 30 days following the officer's
termination of employment as provided herein, the
independent public accountants acting as auditors
for the Company on the date of the Corporate Change
(or another accounting firm designated by the
Company) shall determine whether the sum of the
present value of any "parachute payments" payable
-8-
<PAGE>
under the Plan and the present value of any other
"parachute payments" received by the officer from
the Company upon or after a Corporate Change in
excess of the amount the officer can receive
without causing the officer to be subject to an
excise tax with respect to such amount on account
of Code Section 4999, and shall determine the
amount of any Excise Tax Premium and Income Tax
Premium payable to the officer. The Excise Tax
Premium and Income Tax Premium shall be paid to the
officer as soon as practicable but in no event
later than 35 days following the officer's
termination of employment and shall be net of any
amounts required to be withheld for taxes.
(3) For purposes of this Section (d), "present value"
means the value determined in accordance with the
principles of Section 127(b)(2) of the Code under
the rules provided in Treasury Regulations under
Section 280G of the Code.
(4) References to Code Section 280G herein are specific
references to Section 280G as added to the Code by
the Tax Reform Act of 1984 and as amended by the
-9-
<PAGE>
Tax Reform Act of 1986. To the extent Code
Section 280G is again amended prior to the
termination of the Plan or the expiration or
termination of the Executive Severance Agreement,
or is replaced by a successor statute, the
provisions of this Section (d) shall be deemed
modified without further action of the parties in a
manner consistent with such amendments or successor
statutes, as the case may be. In the event that
Code Section 280G or any successor statute is
repealed, this Section (d) shall cease to be
effective on the effective date of such repeal.
The parties recognize that Treasury Regulations
under Code Sections 280G and 4999 may affect the
amount that may be paid hereunder and agree that,
upon the issuance of any such regulations, this
Plan and the Executive Severance Agreement may be
modified as in good faith may be deemed necessary
in light of the provisions of such regulations to
achieve the purposes hereof, and that consent to
such modifications shall not be unreasonably
withheld.
-10-
<PAGE>
5. FORM OF PAYMENT OF SEVERANCE COMPENSATION.
(a) The severance compensation will be payable in the
form of 36 consecutive monthly payments, commencing
the first day of the month following the month
during which termination of the officer's
employment occurred.
(b) If the officer has not yet reached retirement age
on the date of termination, he may use a portion of
the severance compensation to purchase life
insurance in an amount equal to his final
annualized base salary. The costs of such
insurance to the officer will be one percent of his
final annualized base salary multiplied by the full
and fractional years remaining until retirement
age. After the officer has reached retirement age,
the cost of providing such insurance will be paid
by the Company.
6. CLAIMS: Any claims for benefits hereunder shall be made in
writing to the Compensation Committee.
-11-
<PAGE>
7. LEGAL FEES: The Company shall pay all legal fees and expenses
which the officer may incur as a result of the Company's
contesting the validity or enforceability of the Agreement.
-12-
<PAGE>
EXHIBIT 10.17a
SIXTH AMENDMENT TO THE
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN
WHEREAS, the Oryx Energy Company Capital Accumulation Plan (the "Plan")
was amended and restated to be generally effective as of January 1, 1993; and
WHEREAS, the sponsor of the Plan, Oryx Energy Company (the "Company"),
desires to further amend certain provisions of the Plan.
NOW, THEREFORE, pursuant to the powers reserved to the sponsor, the
Company, in Article XV of the Plan, the Plan is hereby amended, generally
effective as of January 1, 1995 (except as otherwise provided below), as
follows:
I.
Article IV of the Plan is hereby amended as follows:
Section 4.01 of the Plan is hereby amended as follows, effective January
1, 1995:
4.01 COMPANY CONTRIBUTIONS. Each Plan Year, each Employer shall
make a contribution (the "Company Contribution") to the Trust.
Subject to Sections 4.07, 5.02 and 5.05 below, each Employer's
Company Contribution shall consist of (i) the Basic Matching
Contributions attributable to its Employees, (ii) any amount the
company contributes pursuant to Section 4.06(6) or 4.07(6) below,
and (iii) any additional Matching Contribution designated by the
Compensation Committee, in its discretion. All Company
Contributions are conditioned on their deductibility under Code
Section 404(a), unless the Compensation Committee specifically
provides otherwise. Company Contributions may be made in cash or
in the form of shares of Company Stock. Company Contributions
shall be deemed made to enable the Plan to meet its obligations
under Exempt Loans only if so designated by the Compensation
Committee."
<PAGE>
II.
Article V of the Plan is hereby amended as follows:
Section 5.01 of the Plan is hereby amended by adding the following new
sentence after the second sentence of Section 5.01:
"Any additional, discretionary Matching Contributions made
pursuant to clause (iii) of Section 4.01 shall be allocated on a
matching basis as a uniform percentage of each Participant's Basic
Contributions hereunder, subject to Sections 4.06, 4.07, 5.03 and
5.04 hereof."
III.
Article VII of the Plan is hereby amended by revising Section 7.03 to read
as follows, effective August 1, 1995:
"7.03 DIVERSIFICATION OF PARTICIPANT'S ACCOUNT. This Section
shall apply to the extent a Participant's interest in Company
Contributions made on or after August 1, 1989 has been credited
to the Oryx Energy Company Stock Fund ("Eligible Assets"). At any
time during a Plan Year, a Participant may elect to direct the
investment of twenty-five percent (25%) of the Eligible Assets
in his Account (measured in shares of Company Stock as of the
first day of such Plan Year). To the extent a Participant makes
an election under this Section, the portion of the Eligible Assets
in the Participant's Account that is subject to the election shall
be reinvested in accordance with the Participant's directions
pursuant to Section 6.05 above."
Section 7.05 of the Plan is hereby amended effective August 1, 1995 to
read as follows:
"7.05 SPECIAL ESOP GUARANTY. This Section applies solely to the
extent the portion of a Participant's Company Contribution Account
attributable to Company Contributions made on or after August 1,
1989, and before January 1, 1995 is either (i) distributed on or
before July 31, 1995, or (ii) transferred on or before July 31,
1995, to another Fund following the Participant's retirement,
death, Disability or other Termination of Employment (either type
of occurrence is hereinafter referred to as a "Guaranteed
Distribution"). If the value of the Guaranteed Distribution
payable to
<PAGE>
a Participant from the Trust Fund is less than the Participant's
Cumulative Match, the Participant's Employer shall pay the
Participant, as of the date of distribution or transfer of his
interest in the Company Stock Fund, a single cash payment equal
to (a) the Participant's Cumulative Match, less (b) the amount
actually distributable to the Participant from the Company Stock
Fund attributable to Company Contributions made on or after
August 1, 1989, and prior to January 1, 1995. "Cumulative Match"
means the sum of the cash Basic Matching Contributions allocated
to the Participant with respect to the period from August 1, 1989,
through December 31, 1994 without any adjustment for earnings,
gain, loss, depreciation or appreciation."
IV.
The Fourth Amendment to the Oryx Energy Company Capital Accumulation Plan,
executed on July 5, 1994, is hereby amended by rescinding certain provisions
which were to have taken effect upon the extinguishment of the Plan's existing
exempt loan, so that the Preamble and Articles I-IX of the Fourth Amendment
shall read as follows:
"FOURTH AMENDMENT TO THE
ORYX ENERGY COMPANY
CAPITAL ACCUMULATION PLAN
WHEREAS, ORYX ENERGY COMPANY (THE "COMPANY") ESTABLISHED THE
ORYX ENERGY COMPANY CAPITAL ACCUMULATION PLAN, EFFECTIVE AS OF
NOVEMBER 1, 1988 (THE "PLAN"), AND LAST AMENDED AND RESTATED SUCH
PLAN EFFECTIVE AS OF JANUARY 1, 1993; AND THE PLAN WAS FURTHER
AMENDED BY FIRST, SECOND AND THIRD AMENDMENTS; AND
WHEREAS, THE COMPANY DESIRES TO FURTHER AMEND THE PLAN; ON
JUNE 29, 1993, AND AUGUST 31, 1993, THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF THE COMPANY, ACTING PURSUANT TO
AUTHORITY DELEGATED BY THE BOARD, APPROVED CERTAIN AMENDMENTS
TO THE PLAN.
NOW, THEREFORE, PURSUANT TO THE POWERS RESERVED IN ARTICLE XV
OF THE PLAN, THE COMPANY HEREBY AMENDS THE PLAN, EFFECTIVE AS OF
JANUARY 1, 1994 (EXCEPT AS
<PAGE>
OTHERWISE PROVIDED BELOW), AS FOLLOWS. NO AMENDMENT DIRECTLY
AFFECTING THE PAYSOP SUBACCOUNTS (AS DEFINED IN THE PLAN),
INCLUDING THEIR QUALIFICATION UNDER IRC SECTION 409(a), SHALL TAKE
EFFECT UNTIL THE LATER OF: (i) JANUARY 1, 1994 (WHICH IS 84
MONTHS AFTER THE EFFECTIVE DATE OF THE LAST ALLOCATION OF
EMPLOYER SECURITIES TO THE PAYSOP SUBACCOUNTS), OR (ii) AS SOON AS
PRACTICABLE AFTER ISSUANCE OF A FAVORABLE IRS DETERMINATION LETTER
WITH RESPECT TO THIS AMENDMENT.
I.
ARTICLE I OF THE PLAN IS HEREBY AMENDED BY ADDING THE FOLLOWING NEW LANGUAGE
AT THE END OF SECTION 1.02:
PROVIDED, HOWEVER, THAT EFFECTIVE JANUARY 1, 1994, OR, IF LATER,
AS SOON AS PRACTICABLE AFTER RECEIPT OF A FAVORABLE DETERMINATION
LETTER FROM THE INTERNAL REVENUE SERVICE WITH RESPECT TO THIS
AMENDMENT, THE PAYSOP SUBACCOUNTS PORTION OF THE PLAN SHALL NO
LONGER BE INTENDED TO QUALIFY UNDER CODE SECTION 409 AND THE
PAYSOP SUBACCOUNTS SHALL EITHER BE DISTRIBUTED TO PARTICIPANTS,
AT THEIR OPTION, OR REMAIN IN THE PLAN UNDER THE SAME TERMS AND
CONDITIONS APPLICABLE TO OTHER COMPANY CONTRIBUTIONS MADE PRIOR
TO AUGUST 1, 1989.
II.
ARTICLE II OF THE PLAN IS AMENDED AS FOLLOWS:
SECTION 2.22 OF THE PLAN IS HEREBY AMENDED TO READ AS FOLLOWS:
2.22 "FUNDS" MEANS THE FUNDS IN WHICH PARTICIPANTS' ACCOUNTS
ARE INVESTED HEREUNDER, CONSISTING OF THE COMPANY STOCK FUND AND
THE OTHER FUNDS PROVIDED FOR IN SUBSECTION 6.05(1).
SECTIONS 2.25 AND 2.42 OF THE PLAN ARE DELETED IN THEIR ENTIRETY AND THE
REMAINING SECTIONS OF THE PLAN ARE RENUMBERED ACCORDINGLY.
SECTION 2.50 OF THE PLAN IS HEREBY AMENDED BY DELETING THE FOLLOWING DEFINED
TERMS:
"FUND A", "FUND B", AND "FUND C" SUBSECTION 6.05(1)(a)
"FUND ESOP" SUBSECTION 6.05(1)(c)
<PAGE>
"FUND L" SUBSECTION 6.05(1)(d)
"SUPPLEMENTAL CONTRIBUTION" SECTION 4.01
SECTION 2.27 OF THE PLAN IS HEREBY AMENDED TO READ AS FOLLOWS, EFFECTIVE AS
OF THE LATER OF JANUARY 1, 1994 OR THE DATE OF A FAVORABLE INTERNAL REVENUE
SERVICE DETERMINATION LETTER WITH RESPECT TO THIS AMENDMENT:
"2.27 "PAYSOP SUBACCOUNT" MEANS THE PORTION OF A PARTICIPANT'S
COMPANY CONTRIBUTION ACCOUNT ATTRIBUTABLE TO PAYROLL STOCK
OWNERSHIP PLAN CONTRIBUTIONS UNDER THE PREDECESSOR PLAN."
III.
ARTICLE IV OF THE PLAN IS HEREBY AMENDED AS FOLLOWS:
SECTION 4.02 IS AMENDED BY DELETING THE SECOND SENTENCE THEREFROM AND
REVISING THE THIRD SENTENCE THEREOF TO READ AS FOLLOWS:
SUCH BASIC MATCHING CONTRIBUTIONS SHALL BE ALLOCATED TO THE
COMPANY CONTRIBUTION ACCOUNT OF EACH PARTICIPANT WHOSE BASIC
CONTRIBUTIONS WERE SO MATCHED.
SECTION 4.07 OF THE PLAN IS HEREBY AMENDED BY REVISING THE SECOND SENTENCE
THEREOF TO READ AS FOLLOWS:
THE LIMITATIONS OF CODE SECTION 401(m) SHALL BE APPLIED SEPARATELY
TO THE EMPLOYEE STOCK OWNERSHIP ("ESOP") PORTION OF THE PLAN
(CONSISTING OF ALL COMPANY CONTRIBUTIONS MADE AFTER AUGUST 1,
1989, OTHER THAN CONTRIBUTIONS PURSUANT TO SECTIONS 4.06(6) OR
4.07(6) [UNLESS SPECIFICALLY DESIGNATED AS ESOP CONTRIBUTIONS]).
IV.
ARTICLE V OF THE PLAN IS HEREBY AMENDED, EFFECTIVE JANUARY 2, 1995, AS
FOLLOWS:
THE FIRST SENTENCE OF SECTION 5.01 IS AMENDED BY INSERTING THE WORD "BASIC"
BEFORE THE WORDS "MATCHING CONTRIBUTION."
THE THIRD AND FOURTH SENTENCES OF SECTION 5.01 ARE DELETED.
THE FIFTH SENTENCE OF SECTION 5.01 IS REVISED BY CHANGING THE TERM "FUND L" TO
"THE ORYX ENERGY COMPANY STOCK FUND."
<PAGE>
V.
ARTICLE VI OF THE PLAN IS HEREBY AMENDED AS FOLLOWS, EFFECTIVE JANUARY 1,
1994, OR, IF LATER, UPON ISSUANCE OF A FAVORABLE IRS DETERMINATION LETTER WITH
RESPECT TO THIS AMENDMENT (EXCEPT AS OTHERWISE PROVIDED BELOW):
THE FOURTH SENTENCE OF SECTION 6.01 IS HEREBY AMENDED BY DELETING THE WORDS
"PAYSOP SUBACCOUNT" AND SUBSTITUTING THEREFOR THE WORDS: "COMPANY CONTRIBUTIONS
MADE PRIOR TO AUGUST 1, 1989."
SUBSECTION 6.04(2)(a) OF THE PLAN IS HEREBY AMENDED TO READ AS FOLLOWS:
"(a) DIVIDENDS RECEIVED ON ANY SHARES OF COMPANY STOCK THAT
ARE CREDITED TO A PARTICIPANT'S ACCOUNT SHALL BE ALLOCATED TO SUCH
ACCOUNT AND SHALL BE REINVESTED, TO THE EXTENT PRACTICABLE, IN
ADDITIONAL SHARES OF COMPANY STOCK."
SUBSECTION 6.05(1) IS HEREBY AMENDED BY DELETING SUBPARAGRAPHS (b), (c) AND
(d) AND SUBSTITUTING THE FOLLOWING THEREFOR:
"(b) "THE ORYX ENERGY COMPANY STOCK FUND" IS INVESTED TO THE
EXTENT PRACTICABLE IN SHARES OF COMPANY STOCK."
VI.
ARTICLE VIII OF THE PLAN IS HEREBY AMENDED, EFFECTIVE JANUARY 1, 1994, OR, IF
LATER, UPON RECEIPT OF A FAVORABLE IRS DETERMINATION LETTER WITH RESPECT TO THIS
AMENDMENT, AS FOLLOWS:
SECTION 8.01 IS HEREBY AMENDED BY DELETING FROM THE END OF THE FIRST SENTENCE
THE PHRASE: "EXCLUDING HIS PAYSOP SUBACCOUNT"; DELETING THE SECOND SENTENCE
THEREFROM; AND BY DELETING FROM THE THIRD SENTENCE THEREOF THE PHRASE", IN
SECTION 6.04(2)(a) (REGARDING DIVIDEND DISTRIBUTIONS)."
SECTION 8.02 IS HEREBY AMENDED BY DELETING FROM THE SECOND SENTENCE THEREOF
THE PHRASE "FUND D AND FUND ESOP" AND SUBSTITUTING THE PHRASE "THE ORYX ENERGY
COMPANY STOCK FUND", AND BY CHANGING THE REFERENCE TO "FUND D" IN THE
PARENTHETICAL PHRASE TO "THE ORYX ENERGY COMPANY STOCK FUND."
VII.
ARTICLE XI OF THE PLAN IS HEREBY AMENDED AS FOLLOWS:
<PAGE>
SUBSECTION 11.02(9) IS HEREBY AMENDED TO READ AS FOLLOWS:
11.02(9) IN THE EVENT A PARTICIPANT ELECTS A DEFERRED
DISTRIBUTION, HE MAY DIRECT THE INVESTMENT OF HIS INTEREST IN
COMPANY CONTRIBUTIONS MADE ON OR AFTER AUGUST 1, 1989, AMONG THE
FUNDS PURSUANT TO SUBSECTION 6.05(3).
SECTION 11.05 IS HEREBY AMENDED BY DELETING SUBSECTION (f) THEREFROM, AND BY
ADDING THE FOLLOWING LANGUAGE AT THE END OF SECTION 11.05:
NOTWITHSTANDING THE FOREGOING, EFFECTIVE JANUARY 1, 1994 (WHICH IS
MORE THAN 84 MONTHS LATER THAN THE LAST DATE OF ANY ALLOCATION OF
COMPANY STOCK TO ANY PARTICIPANT'S PAYSOP SUBACCOUNT), OR, IF
LATER, UPON ISSUANCE OF A FAVORABLE DETERMINATION LETTER BY THE
INTERNAL REVENUE SERVICE WITH RESPECT TO THIS AMENDMENT, EACH
PARTICIPANT SHALL HAVE AN OPTION TO WITHDRAW HIS PAYSOP
SUBACCOUNT. ANY PARTICIPANT'S PAYSOP SUBACCOUNT THAT IS NOT SO
WITHDRAWN SHALL BE REALLOCATED AND REINVESTED AMONG THE FUNDS AT
THE PARTICIPANT'S DIRECTION, AND SHALL REMAIN FULLY VESTED.
VIII.
ARTICLE XIII OF THE PLAN IS HEREBY AMENDED AS FOLLOWS:
THE THIRD SENTENCE OF SECTION 13.16 IS REVISED TO READ AS FOLLOWS:
THE ORYX ENERGY COMPANY STOCK FUND IS DESIGNED TO INVEST
PRIMARILY IN COMPANY STOCK, WHICH IS A QUALIFYING EMPLOYER
SECURITY WITHIN THE MEANING OF ERISA SECTION 407(d)(5). A
PORTION OF THE ORYX ENERGY COMPANY STOCK FUND MAY BE MAINTAINED
IN CASH OR SHORT-TERM INVESTMENTS TO MEET LIQUIDITY NEEDS OR FOR
OTHER REASONS, AS THE BENEFIT PLANS INVESTMENT COMMITTEE DIRECTS.
V.
Except as amended by this instrument, the Plan, as previously amended, shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
this 8th day of December, 1994.
ORYX ENERGY COMPANY
BY: /s/ William P. Stokes, Jr.
-----------------------------
William P. Stokes, Jr.
Vice President, Corporate
Development and Human
Relations
ATTEST:
By: /s/ Frank B. Sweeney
-----------------------
Title: Corporate Secretary
<PAGE>
EXHIBIT 12
ORYX ENERGY COMPANY
COMPUTATIONS OF CONSOLIDATED RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS -- UNAUDITED (A)
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES:
Fixed Charges:
Consolidated interest cost and debt expense........................ $ 162 $ 163 $ 187 $ 217 $ 241
Interest allocable to rental expense (b)........................... 13 11 11 13 10
--------- --------- --------- --------- ---------
Total............................................................ $ 175 $ 174 $ 198 $ 230 $ 251
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings:
Consolidated income (loss) before provision (credit) for income
taxes............................................................. $ (100) $ (108) $ (4) $ (52) $ 327
Fixed charges...................................................... 175 174 198 230 251
Interest capitalized............................................... (11) (46) (43) (26) (13)
Amortization of previously capitalized interest.................... 14 7 3 3 3
--------- --------- --------- --------- ---------
Total............................................................ $ 78 $ 27 $ 154 $ 155 $ 568
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of Earnings to Fixed Charges (c)............................... .45 .16 .78 .67 2.26
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS:
Fixed Charges:
Consolidated interest cost and debt expense........................ $ 162 $ 163 $ 187 $ 217 $ 241
Preferred stock dividend requirements (d).......................... 2 8 14 20 10
Interest allocable to rental expense (b)........................... 13 11 11 13 10
--------- --------- --------- --------- ---------
Total............................................................ $ 177 $ 182 $ 212 $ 250 $ 261
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings:
Consolidated income (loss) before provision (credit) for income
taxes............................................................. $ (100) $ (108) $ (4) $ (52) $ 327
Fixed charges...................................................... 177 182 212 250 261
Interest capitalized............................................... (11) (46) (43) (26) (13)
Amortization of previously capitalized interest.................... 14 7 3 3 3
--------- --------- --------- --------- ---------
Total............................................................ $ 80 $ 35 $ 168 $ 175 $ 578
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of Earnings to Fixed Charges (c)............................... .45 .19 .79 .70 2.21
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
<FN>
------------------------
(a) The consolidated financial statements of Oryx Energy Company include the
accounts of all subsidiaries (more than 50 percent owned and/or
controlled).
(b) Represents one-third of total operating lease rental expense which is that
portion deemed to be interest.
(c) Earnings for 1994 were inadequate to cover fixed charges, or fixed charges
and preferred stock dividend requirements by $97 million. Earnings for 1993
were inadequate to cover fixed charges, or fixed charges and preferred
stock dividend requirements by $147 million. Earnings for 1992 were
inadequate to cover fixed charges, or fixed charges and preferred stock
dividend requirements by $44 million.
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
Management's discussion and analysis of the Company's financial position and
results of operations follows. This discussion should be read in conjunction
with the charts, graphs, Consolidated Financial Statements and Selected
Financial Data included in this report.
BUSINESS CLIMATE
The fundamentals in worldwide oil markets continue to reflect an excess of
supply over demand. The Company's realized oil price in 1994 fell by $1.02 to
$15.06 per barrel, or 6 percent less than the 1993 price. The decline in 1994
followed a 14 percent decline in 1993 compared to 1992. Prices in early 1995
approximate the levels realized in the fourth quarter of 1994.
As a result of unseasonable weather, U.S. natural gas supplies have exceeded
demand, causing higher storage levels and depressed prices. The Company's
realized U.S. gas price in 1994 fell by $.09 to $1.87 per mcf or 5 percent
lower than the 1993 price. Natural gas prices remain depressed in early 1995.
The Company produced 81 mmeb in 1994, 55 percent crude and 45 percent natural
gas. The company expects to produce 75 mmeb in 1995, depending on the timing
of asset sales.
In January 1995, the Company announced its new corporate direction which
includes a plan to refocus its strategic direction, reduce debt by
approximately $400 million by the end of 1995, reposition assets to a base
level where growth is more reasonably assured and restore profitability through
the lowering of costs at all levels.
LIQUIDITY AND CAPITAL RESOURCES
ED&A OUTLAYS
Total ED&A outlays differ from capital expenditures in that they exclude
capitalized interest but include cash exploration costs. ED&A outlays were
$314 million in 1994, compared to $451 million in 1993 and $390 million in
1992. In 1994, about 30 percent of the Company's total ED&A spending was on
exploration and about 70 percent went for development. In 1995,
12
<PAGE>
total ED&A outlays are expected to be $340 million of which about 80 percent
is targeted for development and 20 percent for exploration, primarily in the
U.S. Finding, development and acquisition costs per eb were $4.76 in 1994. The
average FD&A cost for the five years 1990 through 1994 was $4.62 per eb. In
1994, the Company replaced 80 percent of its production. For the five years
1990 through 1994, the Company's average production replacement rate was 152
percent.
The Company's spending levels will be governed by its cash flow from
operating activities, which will continue to be affected by prevailing oil and
gas prices, cost levels and production volumes. The Company is basing its 1995
spending plans on oil and gas spot prices averaging $18.50 per barrel (WTI) and
$1.80 per mmbtu (HH). These assumptions are subject to change, along with the
associated spending levels.
The Gulf of Mexico will become the centerpiece of the Company's investment
strategy, supplemented by a measured and focused international program.
In 1994, the Company exchanged its interest in the undeveloped U.K.
Britannia field for a doubling of its interests in the U.K. Hutton, Lyell and
Murchison producing fields and $40.4 million in cash. This transaction
increased near-term production volumes and considerably reduced future
development expenditures. Effective January 9, 1995, the Company took over
operatorship of the Hutton, Lyell and Murchison fields.
Capital expenditures in 1993 included $33 million to acquire an additional
interest in the U.K. Ninian field.
CASH FLOW
In 1994, the Company generated net proceeds from divestments of $78 million,
as compared to $46 million in 1993 and $272 million in 1992.
In the fourth quarter of 1993, the Company's $200 million of 9.85 percent
notes matured and were refinanced with medium term notes. In addition, the
Company repurchased in the open market approximately $78 million principal
amount of its 10 3/8 percent debentures and incurred a $7 million extraordinary
loss. The Company's total debt was $1,711 million at December 31, 1994,
compared to $1,769 million at December 31, 1993.
GENERAL
Cash was $10 million at the end of 1994 and 1993. The Company has a
revolving credit facility (Revolver) of $620 million. The Company's current
borrowing capacity is more than adequate to meet its needs under existing
economic conditions. Moreover, the Revolver is available to support the
outstanding commercial paper program, potential refinancing needs and general
liquidity. The Company plans in 1995 to further reduce its debt by $400
million. The debt reduction will be achieved from discretionary cash flow and
from the sale of certain assets. The actual level of debt reduction will
depend in part on the amount and timing of proceeds from asset sales.
During 1994, Standard & Poor's downgraded the Company's senior unsecured
debt from BBB- to BB, subordinated debt from BB+ to B+ and commercial paper
from A-3 to B.
13
<PAGE>
Subsequently, the holders of the Company's senior ESOP notes (approximately
$100 million principal outstanding) exercised their right to require the
Company to repay the notes in full plus a makewhole premium (see Note 11 to the
Consolidated Financial Statements). The Company recognized a $12 million
extraordinary loss associated with the notes, which have been repaid in full
subsequent to year-end.
Any shortfall in expected cash flow from operating activities may require
adjustment of business plans. Among its options, the Company can defer
discretionary ED&A outlays, draw against the unused portion of the Revolver,
seek additional bank borrowings or seek access to capital markets. The Company
is in compliance with all the covenants in its Revolver and expects to remain
in compliance under existing conditions. Management intends to replace the
Revolver prior to its expiration in September 1995. The ability to incur
additional indebtedness as well as the long-term cash generation capability is
ultimately tied to the value of the Company's proved reserve base.
In 1992, the amount of the quarterly dividend on common stock was reduced
from $.30 per share to $.10 per share. In 1994, the Board of Directors
suspended the remaining dividend.
FINANCIAL PERFORMANCE
The net loss for 1994 was $1,025 million, which included a $948 million
cumulative effect of an accounting change (see Note 7 to the Consolidated
Financial Statements), $12 million extraordinary item related to early
extinguishment of debt (see Note 11 to the Consolidated Financial Statements)
and a $59 million restructuring charge. Production volumes increased by
4 million equivalent barrels or 5 percent primarily from the U.K. North Sea.
Depreciation, depletion and amortization expense declined by $124 million or
31 percent because of the accounting change which decreased the Company's
producing property balance by $1,355 million. (See Note 9 to the Consolidated
Financial Statements.) General and administrative expense decreased by 20
percent primarily because of fewer employees and capitalized interest decreased
by 76 percent because of the completion of North Sea development projects.
Total costs and expenses decreased $82 million or 7 percent to $1,080 million in
1994 from $1,162 million in 1993, excluding the provision for restructuring.
The net loss for 1993 was $100 million which included tax-related charges of
$16 million including the recognition of a higher U.S. corporate tax rate,
$5 million of losses on asset disposals and a $7 million extraordinary loss
related to early debt retirement. Production volumes fell by 10 percent due
primarily to asset sales and normal declines. Total costs and expenses
decreased $157 million or 12 percent to $1,162 million in 1993 from $1,319
million in 1992, excluding the provisions for restructuring and relinquishment
of non-producing properties.
14
<PAGE>
Net income for 1992 was $14 million, including $19 million from asset
disposals and a restructuring charge of $9 million. Excluding special charges,
total costs and expenses fell by $263 million, or 17 percent. However, this
was largely offset by the impacts of lower production volumes and oil prices.
Relative to 1991, volumes fell by about 10 percent due to asset sales and
normal declines. Oil prices were more than $2.00 per barrel lower than 1991
levels, while U.S. natural gas prices were higher by $.17 per mcf. The sale of
substantially all of the Company's gas processing business in 1992 negatively
affected subsequent plant margins. In 1992, the Company also recorded a
$9 million net restructuring charge for the estimated cost of workforce
reductions.
PRE-TAX RESTRUCTURING CHARGES
The Company incurred provisions for restructuring of $92 million in 1994 and
$14 million in 1992 (see Note 5 to the Consolidated Financial Statements). The
1994 provision consisted of a charge of $161 million provided in the first
quarter, revised to $76 million because of the accounting change, and
$16 million provided in the fourth quarter. The restructuring program involves
some consolidation of the Company's U.S. business. The net result of these
actions has been a reduction of approximately 345 jobs, which should lead to a
$70 million cost reduction for 1995. For analyses of the restructuring
provisions, see Note 5 to the Consolidated Financial Statements.
HEDGING ARRANGEMENTS
The Company, from time to time, enters into hedging arrangements for foreign
currencies, interest rates and oil and gas prices. The Company has entered
into swap agreements for approximately 26 percent of its estimated 1995 crude
oil production with an average price of $18.24 per barrel. An additional 13
percent is under call option agreements at an average price ceiling of $18.56
per barrel. Approximately 44 percent of its estimated 1995 U.S. gas production
is under swap agreements with an average price of $1.88 per mmbtu. (See Note 2
to the Consolidated Financial Statements.)
INCOME TAXES
Oryx Energy adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1992. The overall effect for remeasurement of foreign deferred tax
for 1992 was zero, a benefit of $5 million in 1993 and a charge of $2 million
in 1994. As a result of applying the provisions of SFAS No. 109, a non-cash
charge or credit is included in business results based on the change in foreign
exchange rates and the corresponding impact on the deferred tax liability. The
Company believes these items tend to distort current period business results
and should be disregarded in analyzing its current business.
15
<PAGE>
POSTRETIREMENT AND
POSTEMPLOYMENT BENEFITS
Oryx Energy adopted SFAS No. 106, "Accounting for Postretirement Benefits,"
effective January 1, 1993, and began accruing the cost of postretirement
benefits other than pensions. The after-tax impact of $59 million, reduced by
$8 million due to a curtailment in 1994, is being amortized over a 20-year
period. The increase in annual expense for providing these benefits was
$4 million after taxes. However, cash outflows are unaffected.
Oryx Energy also adopted SFAS No. 112, "Employer's Accounting for
Postemployment Benefits," effective January 1, 1993, and began accruing the
cost of postemployment benefits. Since the Company has previously recognized
certain costs as required by this standard, the effect of adoption was
insignificant.
ENVIRONMENTAL
The Company's oil and gas operations are subject to stringent environmental
regulations. The Company is dedicated to the preservation of the environment
and has committed significant resources to comply with such regulations.
Although it has been named as a potentially responsible party at sites related
to past operations, the Company believes it is in general compliance with
applicable governmental regulations and that the potential costs to it, in the
aggregate, are not material to its financial condition. However, risks of
substantial costs and liabilities are inherent to the oil and gas business.
Should other developments occur, such as increasingly strict environmental
laws, regulations and enforcement policies or claims for damages resulting from
the Company's operations, they could result in additional costs and liabilities
in the future. (See Note 18 to the Consolidated Financial Statements.)
16
<PAGE>
Appendix
Graph of Proved
Reserves 1990 thru 1994
Graph of Daily
Production 1990
thru 1994
Graph of 1994
ED&A Outlays
Graph of 1995
ED&A Outlays
Graph of Crude And
Condensate Price ($/bbl)
1990 thru 1994
Graph of Crude and
Condensate Production
(mb/d), 1990 thru 1994
Graph of Natural Gas Price
($mcf), 1990 thru 1994
Graph of Natural Gas Production
(mmcf/d), 1990 thru 1994
<PAGE>
ORYX ENERGY COMPANY
SELECTED FINANCIAL DATA
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
(Millions of Dollars, Except Per Share Amounts)
FOR THE PERIOD
Revenues $ 1,072 $1,054 $1,392 $1,598 $2,121
Income (loss) before extraordinary item and
cumulative effect of accounting change (1) $ (65) $ (93) $ 73 $ 19 $ 225
Net income (loss) (1) $(1,025) $ (100) $ 14 $ 19 $ 225
Income (loss) per share of common stock
before extraordinary item and cumulative
effect of accounting change (1) $ (.68) $(1.01) $ .74 $ .08 $ 2.26
Net income (loss) per share of
common stock (1) $(10.53) $(1.08) $ .06 $ .08 $ 2.26
Cash dividends per share of
common stock (2) $ - $ .40 $ .80 $ 1.20 $ 1.20
Cash dividends per share of
preferred stock (3) $ .175 $ .725 $ 1.25 $ 1.80 $ .95
ED&A outlays (4) $ 314 $ 451 $ 390 $ 569 $1,666
AT END OF PERIOD
Total assets (1) $ 2,107 $3,624 $3,738 $4,257 $5,129
Long-term debt $ 1,546 $1,741 $1,489 $2,341 $2,267
Shareholders' equity (deficit) (5) $ (347) $ 676 $ 817 $ 534 $ 622
<FN>
(1) Effective January 1, 1994, the Company adopted a new policy for determining
the ceiling test for its oil and gas properties. A one-time non-cash charge
of $948 million after-tax for the cumulative effect of the change was
recognized in earnings for 1994 (see Note 7 to the Consolidated Financial
Statements). Additionally, net loss for 1994 includes a $59 million
after-tax charge for costs associated with the Company's restructuring
program, a $12 million extraordinary loss net of taxes from debt costs and
a $2 million charge for the remeasurement of foreign deferred taxes (see
Notes 5 and 11 to the Consolidated Financial Statements). Net loss for
1993 includes $5 million of after-tax losses on asset disposals, a $7
million extraordinary loss net of taxes from the repurchase of indebtedness
and a $5 million benefit for remeasurement of foreign deferred taxes (see
Note 11 to the Consolidated Financial Statements). Net income for 1992
includes $19 million of after-tax gains on asset disposals, a $9 million
after-tax charge for costs associated with the Company's restructuring
program and a $59 million benefit for remeasurement of foreign deferred
taxes (see Note 5 to the Consolidated Financial Statements). Net income
for 1991 includes $39 million of after-tax gains on asset disposals, a
$35 million after-tax charge for costs associated with the Company's
restructuring program and a $25 million deferred tax benefit associated
with a U.K. tax rate reduction.
(2) In June 1992, the Company announced the reduction of the quarterly cash
dividend on its $1.00 par value common stock (Common Stock) from $.30 to
$.10 per share. In January 1994, the Company announced the suspension of
its quarterly cash dividend of $.10 per share.
(3) On September 11, 1990, the Company issued 7,259,394 shares of Series B
Junior Cumulative Convertible Preference Stock (Series B Preference Stock).
In November 1994, 2 million shares of Series B Preference Stock were
converted into Common Stock.
(4) Exploration, development and acquisition outlays (ED&A outlays) exclude
capitalized interest of $11 million, $46 million, $43 million, $26 million
and $13 million for 1994, 1993, 1992, 1991 and 1990. ED&A outlays for 1990
include the costs associated with the Company's January 1, 1990 foreign
properties acquisition.
(5) Shareholders' equity (deficit) at December 31, 1994 includes the $948
million charge for the cumulative effect of the change in the Company's
policy for determining the ceiling test for its oil and gas properties
(see Note 7 to the Consolidated Financial Statements). Shareholders'
equity (deficit) at December 31, 1994, 1993 and 1992 includes the effects
of the sale of 17,250,000 shares of Common Stock in August 1992.
</TABLE>
17
<PAGE>
ORYX ENERGY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(MILLIONS OF DOLLARS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
REVENUES
Oil and gas $ 1,082 $1,080 $1,275
Other-net (Note 3) (10) (26) 117
_______ ______ ______
1,072 1,054 1,392
_______ ______ ______
COSTS AND EXPENSES
Operating costs 374 353 397
Production taxes (Note 4) 112 112 137
Exploration costs 104 100 112
Depreciation, depletion and amortization 271 395 409
General and administrative expense 68 85 120
Interest and debt expense 162 163 187
Interest capitalized (11) (46) (43)
Provision for restructuring (Note 5) 92 - 14
Provision for relinquishment of non-producing
properties (Note 5) - - 63
_______ ______ ______
1,172 1,162 1,396
_______ ______ ______
Loss before extraordinary item, cumulative effect of
accounting change and benefit for income taxes (100) (108) (4)
Benefit for income taxes (Note 6) (37) (10) (18)
Remeasurement of foreign deferred tax (Notes 1 and 6) 2 (5) (59)
_______ ______ ______
Income (loss) before extraordinary item and
cumulative effect of accounting change (65) (93) 73
Extraordinary item (Note 11) (12) (7) -
Cumulative effect of accounting change (Note 7) (948) - (59)
_______ ______ ______
NET INCOME (Loss) (1,025) (100) 14
Less Preferred Stock Dividends 1 5 9
_______ ______ ______
NET INCOME (Loss) ATTRIBUTABLE TO COMMON STOCK $(1,026) $ (105) $ 5
======= ====== ======
Net Income (Loss) Per Share of Common Stock (Note 8):
Before extraordinary item and cumulative effect of
accounting change $ (.68) $(1.01) $ .74
Extraordinary item (.12) (.07) -
Cumulative effect of accounting change (9.73) - (.68)
_______ ______ ______
Net income (loss) $(10.53) $(1.08) $ .06
======= ====== ======
Cash Dividends Per Share of Common Stock $ - $ .40 $ .80
======= ====== ======
Weighted Average Number of Common and
Common Equivalent Shares Outstanding
(Millions of Shares) (Note 8) 97.4 97.1 86.4
======= ======= ======
(See Accompanying Notes)
</TABLE>
18
<PAGE>
ORYX ENERGY COMPANY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
<TABLE>
<CAPTION>
1994 1993
_______ ______
(MILLIONS OF DOLLARS)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 10 $ 10
Accounts and notes receivable and other current assets 185 195
_______ _______
Total Current Assets 195 205
Properties, Plants and Equipment (Note 9) 1,840 3,333
Deferred Charges and Other Assets 72 86
_______ _______
Total Assets $ 2,107 $ 3,624
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY (Deficit)
Current Liabilities
Accounts payable $ 105 $ 119
Accrued liabilities (Note 10) 262 177
Current portion of long-term debt (Note 11) 165 28
_______ _______
Total Current Liabilities 532 324
Long-Term Debt (Note 11) 1,546 1,741
Deferred Income Taxes (Note 6) 221 682
Deferred Credits and Other Liabilities (Note 18) 155 201
Commitments and Contingent Liabilities (Note 12)
Shareholders' Equity (Deficit) (Note 13)
Preferred stock, $1 par value; 30,000,000 shares authorized;
5,259,394 and 7,259,394 shares of Series B Junior Cumulative
Convertible Preference Stock issued and outstanding in 1994 and 1993 5 7
Common stock, $1 par value; 250,000,000 shares authorized;
126,703,553 shares issued in 1994 and 1993, 98,946,066 and
96,932,277 shares outstanding in 1994 and 1993 124 124
Additional paid-in capital 2,098 2,204
Accumulated deficit (1,181) (155)
_______ _______
1,046 2,180
Less common stock in treasury, at cost;
24,755,608 and 26,769,400 shares in 1994 and 1993 (1,294) (1,402)
Less loan to ESOP (99) (102)
_______ _______
Shareholders' Equity (Deficit) (347) 676
_______ _______
Total Liabilities and Shareholders' Equity (Deficit) $ 2,107 $ 3,624
======= =======
The successful efforts method of accounting is followed.
(See Accompanying Notes)
</TABLE>
19
<PAGE>
ORYX ENERGY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
1994 1993 1992
------- ----- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income (Loss) $(1,025) $(100) $ 14
Adjustments to reconcile net income (loss) to net cash
from operating activities:
Depreciation, depletion and amortization 271 395 409
Dry hole costs and leasehold impairment 57 45 56
Deferred income taxes 10 15 10
(Gain) loss on sale of assets, net of taxes - 5 (59)
Provision for restructuring, net of taxes 59 - 9
Extraordinary loss on debt 12 7 -
Cumulative effect of accounting change 948 - -
Provision for relinquishment of non-producing
properties - - 63
Proceeds from interest rate hedging activities - 28 9
Other 5 30 29
------- ----- -----
337 425 540
Changes in working capital:
Accounts and notes receivable and other
current assets 14 37 104
Accounts payable (14) (32) (55)
Accrued liabilities (41) (51) (67)
------- ----- -----
NET CASH FLOW PROVIDED FROM OPERATING ACTIVITIES 296 379 522
------- ----- -----
CASH AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Capital expenditures (281) (453) (372)
Proceeds from divestments, net of current taxes 78 46 272
Other (30) 20 (34)
------- ----- -----
NET CASH FLOW USED FOR INVESTING ACTIVITIES (233) (387) (134)
------- ----- -----
CASH AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Proceeds from borrowings 123 359 205
Repayments of long-term debt (185) (307) (860)
Issuance of common stock - - 344
Cash dividends paid on common and preferred stock (1) (44) (77)
------- ----- -----
NET CASH FLOW PROVIDED FROM (USED FOR) FINANCING
ACTIVITIES (63) 8 (388)
------- ----- -----
CHANGES IN CASH AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10 10 10
------- ----- -----
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 10 $ 10 $ 10
======= ===== =====
</TABLE>
(See Accompanying Notes)
20
<PAGE>
ORYX ENERGY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK COMMON STOCK
--------------- --------------- ADDITIONAL RETAINED HELD IN TREASURY LOAN
NUMBER PAR NUMBER PAR PAID-IN EARNINGS ---------------- TO
OF SHARES VALUE OF SHARES VALUE CAPITAL (DEFICIT) SHARES COST ESOP
--------- ----- --------- ----- ---------- --------- ------- ------- -----
(MILLIONS OF DOLLARS, THOUSANDS OF SHARES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AT DECEMBER 31, 1991 106,452 $106 7,259 $ 7 $1,879 $ 52 (26,785) $(1,403) $(107)
Net income 14
Issuance of common stock 17,250 18 326
Issuance from treasury - 1 -
Cash dividends declared:
Common
- $.80 per share (68)
Preferred
- $1.25 per share (9)
Repayment of
loan to ESOP 2
------- ---- ------ --- ------ ------- ------- ------- -----
AT DECEMBER 31, 1992 123,702 124 7,259 7 2,205 (11) (26,784) (1,403) (105)
Net loss (100)
Issuance from treasury (1) 15 1
Cash dividends declared:
Common
- $.40 per share (39)
Preferred
- $.725 per share (5)
Repayment of
loan to ESOP 3
------- ---- ------ --- ------ ------- ------- ------- -----
AT DECEMBER 31, 1993 123,702 124 7,259 7 2,204 (155) (26,769) (1,402) (102)
Net loss (1,025)
Issuance from treasury (1) 13 1
Preferred stock conversion (2,000) (2) (105) 2,000 107
Cash dividends declared:
Preferred
- $.175 per share (1)
Repayment of
loan to ESOP 3
------- ---- ------ --- ------ ------- ------- ------- -----
AT DECEMBER 31, 1994 123,702 $124 5,259 $ 5 $2,098 $(1,181) (24,756) $(1,294) $ (99)
======= ==== ====== === ====== ======= ======= ======= =====
</TABLE>
(See Accompanying Notes)
21
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
Oryx Energy Company (together with its consolidated subsidiaries, unless the
context otherwise requires, Company) was incorporated in Delaware in 1971 and
became a publicly traded company on November 1, 1988. The Company's business
operations consist of the exploration and development of oil and natural gas
reserves. Since December 1, 1985, the Company has functioned as the managing
general partner for and has conducted its United States operations through
Sun Energy Partners, L.P. The majority of the Company's operations located
outside of the United States were acquired effective January 1, 1990 and are
identified herein by the separate geographic areas of the United Kingdom,
Indonesia and Other Foreign.
The consolidated financial statements contain the accounts of the Company
after elimination of intercompany balances and transactions. The Company's
interests in Sun Energy Partners, L.P. and its related operating partnerships
(Partnership) are fully consolidated.
CASH AND CASH EQUIVALENTS
The Company considers highly liquid investments with original maturities of
less than three months to be cash equivalents. Cash equivalents are stated
at cost which approximates market value.
PROPERTIES, PLANTS AND EQUIPMENT
The successful efforts method of accounting is followed for costs incurred in
oil and gas operations.
Capitalization Policy - Acquisition costs are capitalized when incurred.
Costs of unproved properties are transferred to proved properties when proved
reserves are added. Exploration costs, including geological and geophysical
costs and costs of carrying unproved properties, are charged against income
as incurred. Exploratory drilling costs are capitalized initially; however,
if it is determined that an exploratory well did not find proved reserves,
such capitalized costs are charged to expense, as dry hole costs, at that
time. Development costs are capitalized. Costs incurred to operate and
maintain wells and equipment are expensed.
Leasehold Impairment and Depreciation, Depletion and Amortization -
Periodic valuation provisions for impairment of capitalized costs of unproved
properties are expensed. The acquisition costs of proved properties are
depleted by the unit-of-production method based on proved reserves by field.
Capitalized exploratory drilling costs which result in the addition of proved
reserves and development costs are amortized by the unit-of-production method
based on proved developed reserves by field.
Ceiling Test - The Company periodically compares the estimated
undiscounted future pre-tax cash flows of its proved reserves to their net
book values, using current realized prices and costs held constant.
Effective January 1, 1994, the Company changed its policy for performing
ceiling test comparisons to an individual field basis (Note 7). Prior to
1994, the Company performed its ceiling test comparisons on a worldwide
basis. The Company impairs the net book value of its proved properties to
the extent that net book values exceed the estimated undiscounted future
pre-tax cash flows.
Dismantlement, Restoration and Abandonment Costs - Estimated costs of
future dismantlement, restoration and abandonment are accrued as a component
of depreciation, depletion and amortization expense; actual costs are charged
to the accrual.
Retirements - Gains and losses on the disposals of fixed assets are
generally reflected in income. For certain property groups, the cost less
salvage value of property sold or abandoned is charged to accumulated
depreciation, depletion and amortization except that gains and losses for
these groups are taken into income for unusual retirements or retirements
involving an entire property group.
22
<PAGE>
CAPITALIZED INTEREST
The Company capitalizes interest costs incurred as a result of the
acquisition and installation of significant assets.
INCOME TAXES
The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes" in 1992. The effect
to the Company of adopting SFAS No. 109 was to increase deferred foreign
income tax liabilities, which resulted in a $59 million ($.68 per share)
cumulative charge to 1992 earnings. This increase in the Company's deferred
foreign income tax liabilities results from the remeasurement of the
Company's foreign currency denominated deferred tax liabilities at current
exchange rates. The remeasurement provisions of SFAS No. 109 have also
affected the reported earnings of the Company for 1994, 1993 and 1992.
Earnings for 1994, 1993 and 1992 were increased (decreased) by $(2) million,
$5 million and $59 million from remeasuring the Company's foreign deferred
tax liabilities. Management believes that such non-cash remeasurements
distort current period economic results and should be disregarded in
analyzing the Company's current business. Future economic results may also
be distroted because payment of the deferred tax liability is not expected to
occur in the near-term and it is likely that exchange rates will fluctuate
prior to the eventual settlement of the liability.
PENSION AND OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
The Company has established noncontributory defined benefit plans and defined
contribution plans to provide retirement benefits for most of its employees.
Pension benefits are charged against earnings over the periods in which they
are earned by the employees (Note 14).
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for retired employees and certain
insurance and other postemployment benefits for individuals whose employment
is terminated by the Company prior to their normal retirement. Substantially
all of the Company's employees may become eligible for postretirement
benefits if they reach normal retirement age while working for the Company.
Historically, the cost of retiree health care and life insurance benefits and
certain postemployment benefits have been recognized as expenses as such
claims or costs were paid. In December 1990, SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," was issued and
it requires companies to recognize the costs of postretirement benefits other
than pensions on an accrual basis. The Company adopted SFAS No. 106 in 1993,
and began accruing the cost of postretirement benefits other than pensions.
The related transition obligation of $59 million after-tax is being amortized
over a twenty year period. The increase in annual expense for providing these
benefits was $4 million after-tax. However, cash outflows are unaffected by
the adoption of SFAS No. 106.
In November 1992, SFAS No. 112, "Employers' Accounting for Postemployment
Benefits" was issued. It requires companies to recognize the costs of
postemployment benefits on an accrual basis. The Company adopted SFAS No.
112 in 1993, and began accruing the cost of postemployment benefits. Since
the Company had previously recognized certain costs as required by this
standard, the effect of adoption was insignificant.
SALES OF OIL AND GAS
Sales of oil and gas are recorded on the entitlement method. Differences
between actual production and entitlements result in amounts due when
underproduction occurs and amounts owed when overproduction occurs.
FOREIGN CURRENCY TRANSLATION
The U.S. dollar is the functional currency for the Company's consolidated
foreign operations. For those operations, all transaction gains or losses
from currency fluctuations are included in income currently.
FOREIGN EXCHANGE HEDGING CONTRACTS
The Company, from time to time, enters into foreign currency hedging
arrangements to hedge the impact of changes in exchange rates on its
receivables and payables denominated in British pounds. Gains and losses
realized from such arrangements offset transaction gains and losses which are
included in the measurement of the related foreign currency transactions
(Note 2).
23
<PAGE>
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
INTEREST RATE HEDGING AGREEMENTS
The Company enters into interest rate hedging agreements to alter the
floating rate portion of its underlying debt portfolio. Advance proceeds
received under such agreements are included in deferred credits and other
liabilities and are amortized as offsets to interest and debt expense over
the relevant periods. The differentials paid or received during the terms of
such agreements are accrued as interest rates change and are recorded as
adjustments to interest and debt expense (Note 2).
OIL AND GAS PRICE HEDGING ACTIVITY
The Company, from time to time, enters into arrangements to hedge the impact
of price fluctuations on anticipated crude oil and natural gas sales. Advance
payments under such contracts are deferred and charged to oil and gas revenue
during the anticipated sales periods. The differentials paid or received
during the terms of such agreements are accrued as oil and gas prices change
and are charged or credited to oil and gas sales (Note 2).
ENVIRONMENTAL COSTS
The Company establishes reserves for environmental liabilities as such
liabilities are incurred (Note 18).
STATEMENT PRESENTATION
Certain items in years prior to 1994 have been reclassified to conform to the
1994 presentation.
2) FINANCIAL INSTRUMENTS
DERIVATIVES
As discussed in Note 1, the Company enters into hedging arrangements for
foreign exchange, interest rates and crude oil and natural gas prices with
major financial institutions. The Company does not enter into derivative
transactions for trading purposes.
The Company is active in the foreign exchange market to hedge its economic
exposures to the British pound. In addition, the Company has exposures to
other currencies in countries in which it does business. At December 31,
1994 and 1993, the Company had forward contracts outstanding with various
expiration dates to purchase 53 million and 27 million net British pounds at
various prices. At December 31, 1994 and 1993, the fair values of the
Company's outstanding foreign exchange contracts, based on quoted market
prices, were nil, which approximated their associated carrying values. For
the year ended December 31, 1994, the Company had no net transaction gains or
losses and recognized net gains of $1 million from foreign exchange
contracts. For the years ended December 31, 1993 and 1992, the Company
recognized net transaction gains or (losses) of $2 million and $(3) million,
and net losses from foreign exchange contracts of $6 million and $2 million.
The Company also participates in various interest rate hedging
arrangements to manage the floating rate portion of its debt. At December
31, 1994 and 1993, the Company was a party to interest rate hedging
agreements having notional amounts of $600 million, of which $350 million
represented interest rate caps with maturities in 1997 and 1998, and $250
million represented options sold to counterparties to exercise interest rate
swaps on August 15, 1995. At December 31, 1994 and 1993, the aggregate
carrying values of the gains deferred from the Company's interest rate
futures agreements were $32 million and $37 million, and their estimated fair
values, based on quotes from brokers, were $41 million and $35 million. The
terms of the caps expose the Company to interest rate risk when LIBOR (6.5
percent at December 31, 1994) exceeds five percent per year. Under the terms
of the caps, the Company received advance proceeds from the counterparties
and must pay the excess by which LIBOR exceeds five percent on the notional
amounts. Under the terms of the swaps exercisable on August 15, 1995, the
Company received advance proceeds from the counterparties, which amounts are
being deferred until the exercise date. The swap option, if exercised on
August 15, 1995, obligates the Company to pay an annual rate of 9.75 percent
while receiving LIBOR on the notional amount. The terms of the swap option
decrease the exposure of the Company to increases in LIBOR.
24
<PAGE>
At December 31, 1994, the Company was a party to crude oil and natural gas
hedging contracts to hedge about 10 percent of its estimated 1995 crude oil
production at $17.80 per barrel and 40 percent of its estimated 1995 U.S.
natural gas production at $1.95 per mmbtu. At December 31, 1993, the Company
was a party to natural gas hedging contracts to hedge about 30 percent of its
1994 U.S. natural gas production at an average floor of $2.04 per mmbtu and
an average ceiling of $2.28 per mmbtu. These arrangements serve to reduce
the volatility associated with prices of crude oil and natural gas. The
aggregate carrying values of these assets at December 31, 1994 and 1993 were
nil, and the aggregate fair values, based on quotes from brokers, were
approximately $13 million and $4 million.
All of the above mentioned derivative contracts expose the Company to
credit risks. The Company has established controls to manage this risk and
closely monitors the creditworthiness of its counterparties, which are major
financial institutions. The Company believes that losses from nonperformance
are unlikely to occur.
OTHER FINANCIAL INSTRUMENTS
At December 31, 1994 and 1993, the carrying values of the Company's long-term
debt, including amounts due within one year, were $1,711 million and $1,769
million (Note 11). At December 31, 1994 and 1993, the aggregate fair values
of the Company's long-term debt were approximately $1,671 million and $1,779
million, estimated primarily based on quoted market prices for the same or
similar issues or on the current rates offered to the Company for debt of the
same remaining maturities.
3) OTHER REVENUES-NET
The components of other revenues were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Interest income $ 2 $ 1 $ 5
Gas plant margins* 3 6 34
Gain (loss) on sale of assets - (7) 94
Miscellaneous (15) (26) (16)
---- ---- ----
$(10) $(26) $117
==== ==== ====
<FN>
* The Company sold substantially all of its gas plant business in 1992 and
1991. After-tax cash flows from the Company's gas plant business amounted to
$2 million, $4 million and $22 million in 1994, 1993 and 1992 (Note 5).
</TABLE>
4) PRODUCTION TAXES
Production taxes consisted of the following:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
International royalties $ 54 $ 60 $ 75
U.S. severance taxes 28 35 43
U.S. property taxes 15 17 19
U.K. petroleum revenue taxes 15 - -
---- ---- ----
$112 $112 $137
==== ==== ====
</TABLE>
25
<PAGE>
5) CHANGES IN BUSINESS
In 1994, the Company adopted plans to achieve further cost reductions and,
associated therewith, recognized a $92 million ($59 million after-tax)
provision for restructuring. The 1994 provision consisted of a charge of
$161 million provided in the first quarter, revised to $76 million because of
the accounting change (Note 7), and $16 million provided in the fourth
quarter.
An analysis of the first quarter 1994 provision for restructuring follows:
<TABLE>
<CAPTION>
ACTIVITY BALANCE
INITIAL THROUGH AT
PROVISION 12/31/94 12/31/94
--------- -------- --------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Termination and Associated Costs* $ 27 $ 21 $ 6
Proceeds from Divestment of Assets** (40) (40) -
FAS 88 and FAS 106 (Retirement and Postretirement Costs)*** 23 21 2
Book Value of Assets to be Divested and Lease Obligations** 151 129 22
---- ---- ---
Total Provision $161 $131 $30
==== ==== ===
<FN>
* Termination and associated cash costs are primarily comprised of
severance pay, associated employee benefit costs and moving costs for 300
employees. Management expects to complete such payments by the end of 1995.
** Proceeds from the divestment of assets and the book value of such assets
are a result of the Company's program to consolidate its U.S. onshore
position into 6 primary states. The asset disposals were completed during
the fourth quarter of 1994. In addition, under the terms of an operating
lease which expires in June 1995, the Company is obligated to pay the
lessor at the expiration of the lease the amount by which the fair market
value of the asset is less than $37 million, not to exceed $31 million.
*** Costs primarily represent non-cash adjustments due to special termination
benefits and the acceleration of a portion of the transition obligation as a
result of a reduction in the remaining expected future years of service
of active employees.
</TABLE>
An analysis of the fourth quarter 1994 provision for restructuring follows
(in millions of dollars):
<TABLE>
<CAPTION>
INITIAL
PROVISION*
----------
<S> <C>
Termination and Associated Costs** $ 6
FAS 88 and FAS 106 (Retirement and Postretirement Costs)*** 10
---
$16
===
<FN>
* Reflects the balance at December 31, 1994.
** Termination and associated cash costs are primarily comprised of
severance pay and associated employee benefit costs for 45 employees.
Management expects to complete such payments by the end of 1996.
*** Costs primarily represent non-cash adjustments due to special termination
benefits and the acceleration of a portion of the transition obligation as a
result of a reduction in the remaining expected future years of service
of active employees.
</TABLE>
In 1991, the Company commenced a restructuring program designed to
accelerate the implementation of its key operating strategies and reduce its
debt and cost structure. The program outlined a plan to reduce debt by
selling substantially all of the Company's gas plant business and certain
producing oil and gas properties located primarily in the onshore United
States. In 1992, associated with this restructuring, the Company recognized
a $14 million pretax ($9 million after-tax) provision for restructuring
together with a $63 million pretax ($41 million after-tax) provision for the
early relinquishment of certain U.S. non-producing properties. At December
31, 1994, this program was complete.
26
<PAGE>
6) INCOME TAXES
Loss before extraordinary item, cumulative effect of accounting change and
benefit for income taxes consisted of the following:
<TABLE>
<CAPTION>
1994 1993 1992
----- ----- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Before interest expense
United States income (loss) $ (2) $ 30 $ 112
Foreign income (loss) 53 (21) 28
Interest expense (151) (117) (144)
----- ----- -----
$(100) $(108) $ (4)
===== ===== =====
</TABLE>
The benefit for income taxes for each of the years 1994, 1993 and 1992 is
applicable to continuing operations.
The components of the benefit for income taxes on loss before
extraordinary item and accounting change were as follows:
<TABLE>
<CAPTION>
1994 1993 1992**
---- ---- ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Federal
Current tax provision (benefit) $(14) $(18) $ 37
Deferred tax provision (benefit) (16) 4* (55)
State (6) 1 3
Foreign
Current tax provision 9 8 18
Deferred tax benefit (10) (5) (21)
---- ---- ----
$(37) $(10) $(18)
==== ==== ====
<FN>
* Includes a $17 million deferred tax provision associated with a U.S. tax
rate increase.
** Effective January 1, 1992, the Company adopted SFAS No. 109.
</TABLE>
Deferred taxes are provided for the impact of differences between the tax
basis of assets and liabilities and their reported amounts. Significant
components of the Company's deferred income tax assets and liabilities at
December 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Deferred Tax Assets
AMT credit carryforward $ 50 $ 30
Dismantlement, restoration and abandonment 36 31
Loss on controlled foreign corporations 25 14
Geological and geophysical expenditures 11 14
Contingency accruals 12 11
Employee benefit accruals 42 7
Other 2 -
---- ----
Deferred Tax Liabilities 178 107
---- ----
Items associated with capitalized costs
and write-offs 368 705
Miscellaneous accrued liabilities 31 84
---- ----
399 789
---- ----
Net Deferred Tax Liability $221 $682
==== ====
</TABLE>
27
<PAGE>
6) INCOME TAXES (CONTINUED)
No valuation allowance was provided at December 31, 1994 or 1993 because
the Company anticipates that results of operations in future years are more
likely than not to generate taxable income sufficient to allow utilization of
existing deferred tax assets.
Following is the reconciliation of the tax benefit calculated at the U.S.
statutory tax rate to the Company's actual tax benefit on loss before
extraordinary item and accounting change:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
U.S. statutory rate calculation $(35) $(38) $ (1)
Increase (reduction) in taxes resulting from:
Interest allocation adjustment 2 5 (8)
AMT credit - - (8)
Deferred impact of tax rate changes - 17 -
State taxes (6) 1 3
Other 2 5 (4)
---- ---- ----
Benefit for income taxes before remeasurement of
foreign deferred tax (37) (10) (18)
Remeasurement of foreign deferred tax as
required by SFAS No. 109 2 (5) (59)
---- ---- ----
Benefit for income taxes $(35) $(15) $(77)
==== ==== ====
</TABLE>
7) ACCOUNTING CHANGE
Effective January 1, 1994, the Company changed its accounting policy for
calculating the oil and gas asset ceiling test from a total company basis to
an individual field basis. The Company believes the field basis is
preferable because it is the way the Company manages its business. The basis
underlying the calculation of the cumulative effect of this change is a
comparison of the undiscounted pre-tax cash flows of each field's then
existing proved reserves to its net book value at each quarter-end during the
life of the asset. This subjects the ceiling test valuation to the lowest
quarter-end price experienced over the asset's life. Prior to this change,
the Company compared its worldwide undiscounted standardized measure of
future net cash flows from estimated production of proved oil and gas
reserves before income taxes to its net proved property, plant and equipment.
As a result of this change, the Company recognized a non-cash cumulative
effect charge of $948 million ($1,355 million pre-tax) to 1994 results.
Excluding the cumulative charge, the Company's net loss for 1994 was $77
million ($.68 per share before extraordinary item and $.80 per share after
extraordinary item). On a pro forma basis, the Company's reported net
earnings for 1993 and 1992 would have been a net loss of $699 million ($7.18
per share before extraordinary item and $7.25 per share after extraordinary
item) and a net loss of $145 million ($1.78 per share) if this accounting
change had been enacted prior to 1992.
8) INCOME PER SHARE
The 5,259,394 shares of Series B Preference Stock (7,259,394 shares in
1993 and 1992) are common stock equivalents. Conversion of the Series B
Preference Stock in 1994, 1993 or 1992 would have been anti-dilutive to the
Company's income (loss) per share. The Company has reserved 5,111,438 shares
of Common Stock for issuance to the owners of its 7 1/2% Convertible
Subordinated Debentures Due 2014 (Debentures). The Debentures are
convertible into the Company's Common Stock at any time prior to maturity at
$39.125 per share of Common Stock. The Debentures are not common stock
equivalents. If conversion of the Debentures were assumed to have occurred,
the result would have been anti-dilutive to 1994, 1993 and 1992 income (loss)
per share.
28
<PAGE>
9) PROPERTIES, PLANTS AND EQUIPMENT
At December 31, the Company's properties, plants and equipment and
accumulated depreciation, depletion and amortization were as follows:
<TABLE>
<CAPTION>
1994 1993
------ ------
(MILLIONS OF DOLLARS)
<S> <C> <C>
Gross investment
Proved properties $6,112 $6,184
Unproved properties 143 257
Other 65 82
------ ------
6,320 6,523
------ ------
Less accumulated depreciation, depletion and
amortization
Proved properties* 4,424** 3,138
Other 56 52
------ ------
4,480 3,190
------ ------
Net investment $1,840 $3,333
====== ======
<FN>
* Includes $106 million and $91 million for dismantlement, restoration and
abandonment at December 31, 1994 and 1993.
** Includes $1,355 million of impairment of proved oil and gas properties in
1994 (Note 7).
</TABLE>
10) ACCRUED LIABILITIES
At December 31, the Company's accrued liabilities were comprised of the
following:
<TABLE>
<CAPTION>
1994 1993
------ ------
(MILLIONS OF DOLLARS)
<S> <C> <C>
Drilling and operating costs $ 73 $ 89
Restructuring reserve (Note 5) 46 7
Interest payable 64 28
Employee related costs and benefits 28 17
Royalties payable 8 4
Taxes payable 22 6
Other 21 26
---- ----
$262 $177
==== ====
</TABLE>
29
<PAGE>
11) LONG-TERM DEBT
At December 31, long-term debt consisted of the following:
<TABLE>
<CAPTION>
1994 1993
------ ------
(MILLIONS OF DOLLARS)
<S> <C> <C>
9.75% Notes Due 1998 $ 250 $ 250
10.375% Debentures payable $7 annually 1999 - 2018 138 171
10% Notes Due 1999 and 2001 payable $100 in 1999
and $149 in 2001 249 249
7.50% Convertible Subordinated Debentures payable
$10 annually
1999 - 2013 and $50 in 2014 200 200
Medium Term Notes, variable and fixed interest rates
ranging from 5.51% to 9.50% at December 31, 1994
due during 1995 - 2002 230 180
9.30% Notes Due 1996 100 100
7.20% Note (to be reset in 1998) payable semi-annually
1995 - 2006* 100 100
9.50% Notes Due 1999 100 100
8.35% to 8.70% Senior ESOP Notes payable quarterly
1995 - 2009 60 102
Commercial Paper, variable interest rates ranging from
6.62% to 7.00% at December 31, 1994** 50 100
Variable interest rate (ranging from 7.10% to 8.13% at
December 31, 1994) revolving credit facility payable
semi-annually 1996 - 1997*** 208 150
Capitalized lease obligations and other long-term debt
due 1995 - 2002 26 67
------ ------
1,711 1,769
Less current portion 165 28
------ ------
$1,546 $1,741
====== ======
<FN>
* A group of banks has guaranteed the performance of one of the Company's
subsidiary's financial obligations by issuing a letter of credit in favor
of the obligee for the outstanding loan balance plus interest and
compensatory damages. At December 31, 1994, the balance on the letter of
credit was $109 million.
** Commercial paper matures from 4 to 17 days. Such debt is classified as
long-term due to management's intention to continue to use it as a
financing vehicle and the availability of credit under the Company's
revolving credit facility.
*** At December 31, 1994 and 1993, $18 million and $25 million of variable
interest rate revolving credit facility debt was recognized as
extinguished by the Company as a result of having funded an irrevocable
trust with U.S. Treasury obligations. The debt matured in January 1995
and 1994.
</TABLE>
Long-term debt maturities are $165 million, $317 million, $168 million,
$260 million and $242 million for each of the years 1995 through 1999. Each
of the maturing amounts for 1996 and 1997 include $159 million under the
revolving credit facility which management intends to replace no later than
September 1995.
The Company's long-term debt contains restrictive covenants, including a
limitation on total indebtedness; restriction on the payment of common stock
dividends in excess of $1.20 annually and minimum cash flow interest
coverage. At December 31, 1994, the Company was in compliance with all of
its debt covenants and continues to be in compliance with such debt
covenants.
The Company pays a fee ranging from .375 percent to .5 percent of the
unused portion of its $620 million revolving credit facility. The Company
has the capacity to borrow $280 million under such facility; however, the
amount can change daily. The commitments are subject to withdrawal if the
Company were to be in default.
During 1994, Standard & Poor's downgraded the Company's senior unsecured
debt from BBB- to BB, subordinated debt from BB+ to B+ and commercial paper
to B from A-3. Subsequently, the holders of the Company's senior ESOP notes
(approximately $100 million principal amount outstanding) exercised their
right to require the Company to repay the notes in full at par plus a
makewhole premium tied to prevailing rates of interest on U.S. Treasury
obligations. As a result of the downgrade, the Company recognized a $12
million (net of $5 million of tax) extraordinary loss associated with the
notes which have been paid in full subsequent to year end.
During 1994 and 1993, the Company repurchased $33 million and $78 million
of its 10.375 percent debentures at a total cost of $33 million and $88
million resulting in a loss of $7 million (net of $3 million of tax) in 1993
which is reflected as an extraordinary item in the Consolidated Statements of
Income.
30
<PAGE>
12) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has operating leases for office space and other property and
equipment. Total rental expense for such leases for the years 1994, 1993 and
1992 was $37 million, $32 million and $33 million. Under contracts existing
as of December 31, 1994, future minimum annual rental payments applicable to
non-cancelable operating leases that have initial or remaining lease terms
in excess of one year, less minimum rentals to be received under
non-cancelable subleases, were as follows (in millions of dollars):
<TABLE>
<S> <C>
Year ending December 31:
1995 $ 34
1996 17
1997 12
1998 13
1999 12
Later years 75
---
Total minimum payments required $163
====
</TABLE>
Minimum rentals to be received under non-cancelable subleases are $3
million, $2 million, $2 million, $1 million and $1 million for the years 1995
through 1999 and $1 million for later years.
Under the term of an operating lease which expires in June 1995, the
Company is obligated to pay the lessor at the expiration of the lease the
amount by which the fair market value of the assets is less than $37 million,
not to exceed $31 million.
Several legal and administrative proceedings are pending against the
Company. Although the ultimate outcome of these proceedings cannot be
ascertained at this time, and it is reasonably possible that some of them
could be resolved unfavorably to the Company, management believes that any
liabilities which may arise would not be material.
13) SHAREHOLDERS' EQUITY
Effective in October 1988, 3,001,876 shares of Common Stock of the Company
were issued to an operating partnership of the Partnership in exchange for
certain assets, which shares have been deducted from the number of shares
shown in the Consolidated Balance Sheets as outstanding. Such shares are not
entitled to be voted at the annual meeting of shareholders. All other shares
of Common Stock are entitled to one vote per share.
On August 1, 1989, the Company privately placed $110 million of notes
(ESOP Notes) pursuant to the provisions of the Oryx Energy Company Capital
Accumulation Plan (CAP). The Company loaned the proceeds to the CAP which
used the funds to purchase Common Stock of the Company. Prior to 1995, the
CAP made scheduled loan payments using Company contributions to the CAP. In
1995, repayments are being deferred pending a favorable ruling from the
Internal Revenue Service to terminate the leveraged ESOP portion of the CAP.
The Company has 280,000,000 authorized shares of stock, consisting of (i)
250,000,000 shares of Common Stock having a par value of $1.00 per share,
(ii) 15,000,000 shares of Cumulative Preference Stock (Preference Stock)
having a par value of $1.00 and a liquidation preference of $.001 per share,
and (iii) 15,000,000 shares of Preferred Stock (Preferred Stock) having a par
value of $1.00 per share. As of December 31, 1994, there were 98,946,066
shares of Common Stock outstanding. There are two series of Preference Stock
designated, of which there were 5,259,394 shares of Series B Preference Stock
outstanding and 120,000 shares of Series A Preference Stock designated and
reserved for issuance upon exercise of the Stock Purchase Rights (Rights), of
which none were outstanding. The Preferred Stock was authorized by vote of
the shareholders on May 5, 1992 and there are currently no shares of
Preferred Stock designated or outstanding. In addition, on December 31, 1994
the Company had reserved for issuance 5,259,394 shares of Common Stock on
conversion of the outstanding Series B Preference Stock, 5,111,438 shares of
Common Stock on conversion of the outstanding 7 1/2% Convertible Debentures
and 2,456,103 shares of Common Stock upon the exercise of outstanding
management options.
31
<PAGE>
13) SHAREHOLDERS' EQUITY (CONTINUED)
COMMON STOCK
Each share of Common Stock entitles its record owner to one vote on all
matters submitted to the stockholders for action. The stockholders are not
entitled to cumulative voting rights in the election of directors. Subject
to the rights of holders of any class of Preference Stock or Preferred Stock,
the holders of Common Stock are entitled to share ratably in dividends in
such amount as may be declared by the Company's Board of Directors (Board)
from time to time out of funds legally available therefor. The payment of
dividends on the Common Stock is restricted under the Credit Agreement to no
more than $1.20 per share annually, and is prohibited in the event of a
default.
PREFERENCE STOCK
The Board is authorized by the Certificate to issue Preference Stock in one
or more series and to fix for each such series such qualifications,
privileges, limitations, options, conversion rights, and other special rights
as are stated and adopted by the Board and as are permitted by the
Certificate and the Delaware General Corporation Law, including the
designation and number of shares issuable, the dividend rate, voting rights,
conversion rights, redemption and sinking fund provisions, and liquidation
values of each such series.
Holders of Preference Stock are entitled to receive, when and as declared
by the Board out of assets legally available for that purpose, annual
cumulative dividends payable in quarterly installments. Unless full
cumulative dividends on the Preference Stock have been paid, no dividend may
be declared or paid on, or other distributions made upon, Preferred Stock or
Common Stock, nor may any Preferred Stock or Common Stock be redeemed or
purchased by the Company. Subject to certain conditions, the Company may
redeem all or any part of the Preference Stock then outstanding.
The Company had 5,259,394 shares of Series B Preference Stock outstanding
at December 31, 1994. Any such shares held by the original holder shall be
entitled to a dividend in excess of the dividend payable on Common Stock.
Any periodic dividend declared subsequent to 1994 will be increased by a
dividend preference equal to $.025 per share with respect to the first and
second succeeding quarters. In 1994, the Board of Directors of the Company
voted to suspend the dividend on Common Stock. Such suspension will not
affect the dividend preference on the Series B Preference Stock.
Series B Preference Stock is non-voting, except in certain cases specified
in the Certificate or by law, and it is convertible into Common Stock on a
share-for-share basis by the holder thereof subject to certain restrictions.
After September 10, 1995, if the original holder of the Series B Preference
Stock still owns it, those shares may be converted into Common Stock on a
share-for-share basis by the holder thereof without the restrictions that
applied on or before that date.
PREFERRED STOCK
The Board is authorized by the Certificate to issue Preferred Stock in one or
more series and to fix for each such series such qualifications, privileges,
limitations, options, conversion rights, and other special rights as are
stated and adopted by the Board and as are permitted by the Certificate and
the Delaware General Corporation Law, including the designation and number of
shares issuable, the dividend rate, voting rights, conversion rights,
redemption and sinking fund provisions, and liquidation values of each such
series.
Subject to the rights of holders of any class of Preference Stock, if any,
the holders of Preferred Stock are entitled to receive dividends, when and as
declared by the Board out of funds legally available for that purpose. As to
dividends and rights upon liquidation, dissolution or winding up, the
Preferred Stock will rank junior and subordinate to any series of Preference
Stock, and prior to the Common Stock.
RIGHTS
On September 11, 1990, the Board declared a dividend distribution of one
Stock Purchase Right on each outstanding share of Common Stock, payable
September 28, 1990, to holders of record of the Common Stock on that date.
The Rights are also issuable upon the issuance of additional shares of Common
Stock prior to the time the Right are redeemed or expire. Initially, the
Rights are represented by the certificates for the Common Stock and will
trade only with the Common Stock. The Rights will expire September 11, 2000
unless earlier redeemed by the Company.
32
<PAGE>
14) EMPLOYEE AND RETIREE BENEFIT PLANS
DEFINED BENEFIT PENSION PLANS
The Company has noncontributory defined benefit plans which provide
retirement benefits for most of its employees. Plan benefits are generally
based on years of service, age at retirement and the employee's compensation.
It is the Company's policy to fund defined benefit pension contributions, at
a minimum, in accordance with the requirements of the Internal Revenue Code.
The cost of the Company's primary defined benefit pension plans consisted
of the following:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Service cost (cost of benefits earned
during the year) $ 5 $ 6 $ 8
Interest cost on projected benefit obligation 36 38 39
Actual return on plan assets 4 (59) (18)
Net amortization and deferral* (47) 17 (28)
---- ---- ----
Net periodic pension cost** $ (2) $ 2 $ 1
==== ==== ====
<FN>
* Estimated returns on assets are used in determining net periodic pension
cost. Differences between estimated and actual returns are included in net
amortization and deferral.
** Does not include $1 million curtailment loss and $13 million cost of
special termination benefits due to the reduction in workforce in 1994.
</TABLE>
The following table sets forth the funded status and amounts recognized in
the Company's Consolidated Balance Sheets at December 31:
<TABLE>
<CAPTION>
1994 1993
------------------------- ------------------------
PLANS IN PLANS IN
PLANS IN WHICH PLANS IN WHICH
WHICH ASSETS ACCUMULATED WHICH ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
------------------------- ------------------------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligation:
Vested $360 $ 81 $392 $82
Nonvested 15 2 16 3
---- ---- ---- ---
Accumulated benefit
obligation 375 83 408 85
Effect of projected future
salary increases 22 3 31 2
---- ---- ---- ---
Projected benefit obligation 397 86 439 87
Less plan assets at fair
value* 390 - 457 -
---- ---- ---- ---
Projected benefit obligation
in excess of (less than)
plan assets 7 86 (18) 87
Unrecognized net transition
asset (obligation) 32 (14) 38 (17)
Unrecognized prior service
benefit (cost) - 2 (4) 3
Unrecognized net gain (loss) (61) (22) (37) (27)
Additional minimum liability - 31 - 39
---- ---- ---- ---
Accrued pension liability
(asset)** $(22) $ 83 $(21) $85
==== ==== ==== ===
<FN>
* Plan assets consist principally of commingled trust funds, marketable
equity securities, corporate and government debt securities and real
estate. At December 31, 1994, less than one percent of plan assets was
invested in Common Stock of the Company.
** Accrued pension liability is included in "Deferred Credits and Other
Liabilities" in the Consolidated Balance Sheets.
</TABLE>
33
<PAGE>
14) EMPLOYEE AND RETIREE BENEFIT PLANS (CONTINUED)
As of December 31, 1994 and 1993, the projected benefit obligations were
determined using weighted average assumed discount rates of 8 and 7 percent
and a rate of compensation increase of 4 percent. The weighted average
expected long-term rate of return on plan assets was 9.5 percent in 1994 and
1993. All of these rates are subject to change in the future as economic
conditions change.
DEFINED CONTRIBUTION PENSION PLANS
Defined contribution plans, which are designed to provide retirement
benefits, are available to substantially all employees. Contributions, which
are principally based on employees' compensation, are expensed as incurred.
At December 31, 1994, the principal defined contribution plan is CAP which
is a combined stock bonus and leveraged ESOP and is available to
substantially all U.S. employees. The first 5 percent of employee
contributions are matched by the Company at 110 percent up to the first
$50,000 of employee base salary and at 100 percent thereafter. In 1994, the
Company's contributions to CAP were used to repay the debt issued to fund the
purchase of Common Stock held by the leveraged ESOP. Costs recognized for
defined contribution plans amounted to $11 million, $10 million and $9
million for 1994, 1993 and 1992.
Additional information with respect to the leveraged ESOP portion of CAP
is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Interest cost on ESOP debt $ 8 $ 9 $ 9
Company cash contributions to the ESOP $13 $10 $ 8
ESOP dividends used for debt service $ - $ 1 $ 3
</TABLE>
HEALTH CARE AND LIFE INSURANCE BENEFITS
The Company sponsors unfunded defined benefit health care and life insurance
benefit plans to substantially all employees and retirees. Benefits under
the health care plan are provided on a self-insured basis or through a Health
Maintenance Organization. The health care plan provides comprehensive major
medical coverage which integrates with Medicare and contains provisions for
cost sharing with participants through contributions, coinsurance,
deductibles and caps on employer costs. Benefits under the life insurance
plan are provided through an insurance contract. The life insurance plan
contains provisions for retiree cost sharing through contributions and
provides benefits based on preretirement compensation with a scheduled
reduction in benefits commencing at age 66 and termination of all benefits at
age 70 for substantially all participants.
The cost of health care and life insurance benefit plans was $19 million,
$20 million and $16 million, of which $14 million, $12 million and $7 million
was for retirees in 1994, 1993 and 1992. The Company adopted SFAS No. 106 on
January 1, 1993, and in accordance with its provisions has changed to the
accrual accounting method in computing postretirement health care and life
insurance benefit plan expense. The Company formerly accounted for these
costs using the pay-as-you-go (cash) method.
34
<PAGE>
The cost, net of retiree contributions, of the postretirement health care
and life insurance benefit plans calculated in accordance with the provisions
of SFAS No. 106 is as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Service cost (cost of benefits earned
during the year) $ 1 $ 1
Interest cost on the accumulated postretirement
benefit obligation 8 7
Actual return on plan assets - -
Amortization of transition obligation 4 4
Net amortization of other components 1 -
--- ---
Net periodic postretirement benefit cost* $14 $12
=== ===
<FN>
* Does not include $13 million curtailment loss due to the reduction in
workforce in 1994.
</TABLE>
The following table sets forth the funded status and amounts reported in
the Company's Consolidated Balance Sheets at December 31:
<TABLE>
<CAPTION>
1994 1993
---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 81 $ 83
Active employees eligible to retire 4 4
Active employees not yet eligible to retire 10 17
---- ----
Total accumulated postretirement benefit obligation 95 104
Less plan assets at fair value - -
---- ----
Accumulated obligation in excess of plan assets 95 104
Unrecognized net loss (5) (12)
Unrecognized prior service benefit 5 -
Unrecognized transition obligation (70) (86)
---- ----
Accrued postretirement benefit liability* $ 25 $ 6
==== ====
<FN>
* Accrued postretirement benefit liability is included in "Deferred Credits
and Other Liabilities" in the Consolidated Balance Sheet.
</TABLE>
The assumed health care cost trend rate used to measure the expected cost
of benefits covered by the plan for 1995 is approximately 7 percent. Health
care cost trend rates for future years are assumed to gradually trend
downward over a six year period to meet and thereafter parallel the projected
rate of general inflation of 4.5 percent. A 1 percent increase in the
assumed health care cost trend rates for future years would result in no
increase in annual cost but an increase of $6 million in the accumulated
postretirement benefit obligation for the Company's health care plan.
The weighted average assumed discount rates used to measure the
accumulated postretirement benefit obligation are 8 and 7 percent in 1994 and
1993. For the life insurance plan, an assumed rate of increase of
compensation of 4 percent was used to measure the accumulated postretirement
benefit obligation.
35
<PAGE>
15) MANAGEMENT INCENTIVE PLANS
The Company provides management incentive plans to certain employees in
the management of the Company. There was no charge against income for these
plans in 1994 compared to charges of $2 million and $4 million for 1993 and
1992.
The principal management incentive plans are the 1992 Long-Term
Incentive Plan (1992 LTIP), the Long- Term Incentive Plan (LTIP) and the
Executive Long-Term Incentive Plan (ELTIP). The ELTIP provides that no
awards may be granted after November 1, 1988 and was replaced by the LTIP
which provides that no awards may be granted after December 31, 1991. All
previous awards granted under both the ELTIP and LTIP remain in effect in
accordance with their terms. As of December 31, 1994, there were no
outstanding awards granted under the ELTIP. The 1992 LTIP replaced the LTIP
and became effective January 1, 1992. A maximum of 3,000,000 shares of
Common Stock were authorized for issuance under the 1992 LTIP.
Under the provisions of these plans, stock options, stock appreciation
rights and limited rights were granted in various tandem combinations so that
the exercise of any one of them will reduce, on a one-for-one basis, the
tandem options or rights. In addition, certain stock options were granted
which become exercisable (subject to the option vesting schedule) only upon
the cancellation of the related performance shares for non- attainment of
performance targets.
The following table summarizes information with respect to Common Stock
options awarded under the 1992 LTIP, the LTIP and the ELTIP:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------- ----------------------- -------------------------
SHARES SHARES SHARES
UNDER OPTION PRICE UNDER OPTION PRICE UNDER OPTION PRICE
OPTION PER SHARE OPTION PER SHARE OPTION PER SHARE
--------- -------------- --------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, January 1 1,914,832 $19.63-$44.13 1,491,116 $20.36-$44.13 1,076,265 $20.36-$44.13
Granted* 643,900 $17.44 470,690 $19.63 449,900 $26.00
Exercised** - - - - (944) $20.36
Cancelled (102,629) $17.44-$44.13 (46,974) $20.36-$44.13 (34,105) $24.16-$44.13
--------- --------- ---------
Outstanding, December 31 2,456,103 $17.44-$44.13 1,914,832 $19.63-$44.13 1,491,116 $20.36-$44.13
========= ========= =========
Exercisable, December 31** 1,278,033 $17.44-$44.13 773,256 $24.16-$44.13 571,390 $20.36-$44.13
========= ========= =========
Available for grant,
December 31*** 1,262,086 1,835,440 2,411,653
========= ========= =========
<FN>
* Includes 209,300 and 196,340 stock options granted in 1993 and 1992 in
tandem with performance shares which become exercisable only upon
cancellation of the related performance shares.
** Excludes outstanding stock options granted in 1993 and 1992 in tandem
with performance shares which become exercisable (subject to the option
vesting schedule) only upon cancellation of the related performance shares.
In January 1995, 148,435 such stock options granted in 1992 became
exercisable due to the cancellation of the related performance shares.
*** Shares available for grant is net of the number of performance shares
outstanding which were granted under the provisions of these plans.
</TABLE>
36
<PAGE>
16) GEOGRAPHIC SEGMENT INFORMATION
During 1994, sales of oil to the Company's top purchaser totaled
approximately 18 percent of oil revenue. During 1993, sales of oil to the
Company's top two purchasers totaled approximately 12 and 10 percent of oil
revenue. Sales of gas to the Company's top purchaser in 1994 totaled
approximately 12 percent and in 1993 totaled approximately 14 percent of gas
revenue. The Company believes that the loss of any major purchaser would not
have a material adverse effect on the Company's business.
Financial information by segment for the years ended December 31, 1994,
1993 and 1992 are summarized as follows:
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
Revenues
Oil and gas $ 624 $355 $ 79 $ 24 $ 1,082
Other (10) - - - (10)
------ ---- ---- ---- -------
Total Revenues 614 355 79 24 1,072
------ ---- ---- ---- -------
Expenses
Operating costs 197 146 24 7 374
Production taxes 44 28 36 4 112
Exploration costs 54 12 17 21 104
Depr., depl. and amort. 167 86 7 11 271
Miscellaneous - 1 - - 1
------ ---- ---- ---- -------
Total Operating Expenses 462 273 84 43 862
------ ---- ---- ---- -------
Operating Profit (Loss)* $ 152 $ 82 $ (5) $(19) 210
====== ==== ==== ====
General and administrative expense (68)
Interest, net (150)
Provision for restructuring (92)
Benefit for income taxes 37
Remeasurement of foreign deferred tax (2)
Extraordinary item (12)
Cumulative effect of accounting change (948)
-------
Net Loss $(1,025)
=======
Capital Expenditures $ 168** $ 65*** $ 28 $ 20 $ 281
====== ==== ==== ==== =======
Identifiable Assets $1,508 $459 $126 $ 14 $ 2,107
====== ==== ==== ==== =======
<FN>
* Provision (benefit) for income taxes on 1994 operating profits,
calculated at statutory rates, are $55 million, $27 million and $(3)
million for the United States, United Kingdom and Indonesia. No statutory
tax benefit results from the Other Foreign operating loss of $19 million.
** Includes capitalized interest of $5 million.
*** Includes capitalized interest of $6 million.
</TABLE>
37
<PAGE>
16) GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1993
Revenues
Oil and gas $ 700 $ 265 $ 97 $ 18 $1,080
Other (26) - - - (26)
------ ------ ---- ---- ------
Total Revenues 674 265 97 18 1,054
------ ------ ---- ---- ------
Expenses
Operating costs 194 127 29 3 353
Production taxes 52 9 44 7 112
Exploration costs 57 19 13 11 100
Depr., depl. and amort. 261 111 14 9 395
Miscellaneous 1 - - - 1
------ ------ ---- ---- ------
Total Operating Expenses 565 266 100 30 961
------ ------ ---- ---- ------
Operating Profit (Loss)* $ 109 $ (1) $ (3) $(12) 93
====== ====== ==== ====
General and administrative expense (85)
Interest, net (116)
Benefit for income taxes 10
Remeasurement of foreign deferred tax 5
Extraordinary item (7)
------
Net Loss $ (100)
======
Capital Expenditures $ 202 $ 232** $ 13 $ 6 $ 453**
====== ====== ==== ==== ======
Identifiable Assets $1,861 $1,589 $103 $ 71 $3,624
====== ====== ==== ==== ======
<FN>
* Provision (benefit) for income taxes on 1993 operating profits, calculated
at statutory rates, are $44 million and $(2) million for the United States
and Indonesia
** Includes capitalized interest of $46 million.
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1992
Revenues
Oil and gas $ 799 $ 335 $127 $14 $1,275
Other 119 (2) - - 117
------ ------ ---- --- ------
Total Revenues 918 333 127 14 1,392
------ ------ ---- --- ------
Expenses
Operating costs 215 149 26 7 397
Production taxes 62 17 58 - 137
Exploration costs 67 24 13 8 112
Depr., depl. and amort. 276 108 21 4 409
Miscellaneous 1 4 - - 5
Provision for relinquishment of
non-producing properties 63 - - - 63
------ ------ ---- --- ------
Total Operating Expenses 684 302 118 19 1,123
------ ------ ---- --- ------
Operating Profit* $ 234 $ 31 $ 9 $(5) 269
====== ====== ==== ===
General and administrative expense (120)
Interest, net (139)
Provision for restructuring (14)
Benefit for income taxes 18
Remeasurement of foreign deferred tax 59
Cumulative effect of accounting change (59)
------
Net Income $ 14
======
Capital Expenditures $ 101 $ 249** $ 12 $10 $ 372**
====== ====== ==== === ======
Identifiable Assets $2,086 $1,461 $113 $78 $3,738
====== ====== ==== === ======
<FN>
* Provisions for income taxes on 1992 operating profits, calculated at
statutory rates, are $82 million, $8 million and $5 million for the United
States, United Kingdom and Indonesia. No statutory tax benefit
results from the Other Foreign operating profit of $5 million.
** Includes capitalized interest of $43 million.
</TABLE>
17) STATEMENT OF CASH FLOWS
Amounts paid for interest and income taxes were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Interest paid (net of capitalized interest) $128 $119 $133
Income taxes paid (refunded) $(11) $ 14 $ 39
</TABLE>
During 1994, the Company exchanged its interests in the undeveloped U.K.
North Sea Britannia field and certain other undeveloped domestic properties,
for Conoco's interests in the developed U.K. North Sea Hutton, Lyell and
Murchison fields and certain undeveloped interests. This transaction was
accounted for by the Company as a non-cash property exchange, except for $40
million of associated divestment proceeds received by the Company. During
1993, the Company recognized deferred tax liabilities of $3 million
associated with international properties acquisitions. In accordance with
Statement of Financial Accounting Standards No. 95, "Statement of Cash
Flows," non-cash transactions are not reflected within the accompanying
Consolidated Statements of Cash Flows.
39
<PAGE>
18) DEFERRED CREDITS AND OTHER LIABILITIES
At December 31, the Company's deferred credits and other liabilities
were comprised of the following:
<TABLE>
<CAPTION>
1994 1993
---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Employee benefit obligations $ 80 $ 75
Deferred gains on interest rate hedges 32 37
Accrued acquisition financing - 33
Minority interest in consolidated subsidiaries 17 27
Accrued environmental cleanup costs 21 20
Other 5 9
---- ----
$155 $201
==== ====
</TABLE>
Environmental cleanup costs have been accrued in response to the
identification of several sites that require cleanup based on environmental
pollution, some of which have been designated as superfund sites by the
Environmental Protection Agency (EPA). The Company has been named as a
potentially responsible party (PRP) at four sites pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended. At two of these sites, the Company has been named as a de
minimis party and therefore expects its liability to be small. At a third
site, the Company is reviewing its options and anticipates that it will
participate in steering committee activities with the EPA. At the fourth and
largest site, the Operating Industries, Inc. site in California, the Company
has participated in a steering committee consisting of 139 companies. The
steering committee and other PRP's previously entered into two partial
consent decrees with the EPA providing for remedial actions which have been
or are to be completed. The steering committee has successfully negotiated a
third partial consent decree which provides for the following remedial
actions: a clay cover, methane capturing wells, and leachate destruction
facilities. The remaining work at the site involves groundwater evaluation
and long-term operation and maintenance. The Company is a member of the
group that is responsible for carrying out the first phase of the work, which
is expected to take 5 to 8 years. Completion of all phases is estimated to
take up to 30 years. The maximum liability of the group, which is joint and
several for each member of the group, is expected to range from approximately
$450 million to $600 million, of which the Company's share is expected to be
approximately $10 million (net of $3 million in recoveries from third
parties). Cleanup costs are payable over the period that the work is
completed.
Based on the facts outlined above and the Company's ongoing analyses of
the actions where it has been identified as a PRP, the Company believes that
it has accrued sufficient reserves to absorb the ultimate cost of such
actions and that such costs therefore will not have a material impact on the
Company's liquidity, capital resources or financial condition. While
liability at superfund sites is typically joint and several, the Company has
no reason to believe that defaults by other PRPs will result in liability of
the Company materially larger than expected.
40
<PAGE>
REPORT OF INDEPENDENT ACCOUNANTS
To the Shareholders and Board of Directors, Oryx Energy Company:
We have audited the accompanying consolidated balance sheets of Oryx
Energy Company and its Subsidiaries as of December 31, 1994 and 1993 and the
related consolidated statements of income, cash flows and changes in
shareholders' equity (deficit) for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Oryx
Energy Company and its Subsidiaries as of December 31, 1994 and 1993 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
As discussed in Notes 1 and 7 to the Consolidated Financial Statements,
the Company changed its accounting policy for calculating the oil and gas
asset ceiling test in 1994, its methods of accounting for postretirement
benefits other than pensions and postemployment benefits in 1993 and its
method of computing deferred income taxes in 1992.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
February 19, 1995
41
<PAGE>
ORYX ENERGY COMPANY
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
OIL AND GAS DATA
CAPITALIZED COSTS
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1994
Proved properties $3,975 $1,863 $196 $78 $6,112
Unproved properties 42 87 10 4 143
------ ------ ---- --- ------
Total capitalized costs 4,017 1,950 206 82 6,255
Less accum. depr., depl. and amort. 3,011 1,254 131 28 4,424
------ ------ ---- --- ------
Net capitalized costs (Note 7) $1,006 $ 696 $ 75 $54 $1,831
====== ====== ==== === ======
DECEMBER 31, 1993
Proved properties $4,193 $1,741 $185 $65 $6,184
Unproved properties 60 185 6 6 257
------ ------ ---- --- ------
Total capitalized costs 4,253 1,926 191 71 6,441
Less accum. depr., depl. and amort. 2,605 417 98 18 3,138
------ ------ ---- --- ------
Net capitalized costs $1,648 $1,509 $ 93 $53 $3,303
====== ====== ==== === ======
</TABLE>
COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
1994
Property acquisition costs:
Proved $ - $ - $ - $ - $ -
Unproved 4 - - - 4
Exploration costs 41 11 16 23 91
Development costs 144* 56** 17 2 219
---- --- --- --- ---
Total $189 $67 $33 $25 $314
==== ==== === === ====
1993
Property acquisition costs:
Proved $ 11 $ 33 $ - $ - $ 44
Unproved 8 - - - 8
Exploration costs 62 15 15 11 103
Development costs 147 147** 2 - 296
---- ---- --- --- ----
Total $228 $195 $17 $11 $451
==== ==== === === ====
1992
Property acquisition costs:
Proved $ - $ - $ - $ - $ -
Unproved - - - - -
Exploration costs 51 25 13 12 101
Development costs 85 194** 8 2 289
---- ---- --- --- ----
Total $136 $219 $21 $14 $390
==== ==== === === ====
<FN>
* Excludes capitalized interest of $5 million for 1994.
** Excludes capitalized interest of $6 million, $46 million and $43 million
for 1994, 1993 and 1992.
</TABLE>
42
<PAGE>
EXPLORATION COSTS
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
1994
Dry hole costs $10 $ 4 $12 $13 $39
Leasehold impairment 18 - - - 18
Geological and geophysical 25 7 5 8 45
Other 1 1 - - 2
--- --- --- --- ---
$54 $12 $17 $21 $104
=== === === === ====
1993
Dry hole costs $21 $ 5 $ 8 $ 3 $ 37
Leasehold impairment 3 4 - 1 8
Geological and geophysical 31 9 5 7 52
Other 2 1 - - 3
--- --- --- --- ---
$57 $19 $13 $11 $100
=== === === === ====
1992
Dry hole costs $12 $ 4 $ 3 $ 2 $ 21
Leasehold impairment 26 8 1 - 35
Geological and geophysical 28 11 9 5 53
Other 2 1 - - 3
--- --- --- --- ---
$68 $24 $13 $ 7 $112
=== === === === ====
</TABLE>
ESTIMATED NET QUANTITIES OF PROVED OIL AND GAS RESERVES
Proved reserve quantities were based on estimates prepared by Company
engineers in accordance with guidelines established by the Securities and
Exchange Commission and were reviewed by Gaffney, Cline & Associates, Inc.,
independent petroleum engineers. The Company considers such estimates to be
reasonable; however, due to inherent uncertainties and the limited nature of
reservoir data, estimates of underground reserves are imprecise and subject
to change over time as additional information becomes available.
There has been no major discovery or other favorable or adverse event that
has caused a significant change in estimated proved reserves since December
31, 1994. The Company has no long-term supply agreements or contracts with
governments or authorities in which it acts as producer nor does it have any
interest in oil and gas operations accounted for by the equity method.
43
<PAGE>
PROVED RESERVES
<TABLE>
<CAPTION>
RECOVERABLE
CRUDE OIL AND CONDENSATE NATURAL GAS LIQUIDS NATURAL GAS
(MILLIONS OF BARRELS) (MILLIONS OF BARRELS) (BILLIONS OF CUBIC FEET)
--------------------------------- --------------------- ------------------------
OTHER
U.S. U.K. INDONESIA FOREIGN TOTAL U.S. U.S.* U.K. TOTAL
---- ---- --------- ------- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31, 1991 294 190 31 26 541 66 1,775 266 2,041
Revisions of previous estimates (14) - 5 - (9) - (31) - (31)
Improved recovery 4 - - - 4 - 1 - 1
Purchases of minerals
in place - - - - - - - - -
Sales of minerals in place (21) - - (15) (36) (34) (198) - (198)
Extensions and discoveries 15 12 8 5 40 - 177 196 373
Production (23) (13) (6) (1) (43) (7) (214) (35) (249)
--- --- -- --- --- --- ----- --- -----
BALANCE AT
DECEMBER 31, 1992 255 189 38 15 497 25 1,510 427 1,937
Revisions of previous estimates (4) (3) 4 2 (1) (1) 5 52 57
Improved recovery 1 - - - 1 - 1 - 1
Purchases of minerals
in place - 13 - - 13 - 4 - 4
Sales of minerals in place (12) - - - (12) (2) (66) - (66)
Extensions and discoveries 19 2 - 8 29 2 168 - 168
Production (21) (13) (5) (1) (40) (3) (191) (29) (220)
--- --- -- --- --- --- ----- --- -----
BALANCE AT
DECEMBER 31, 1993 238 188 37 24 487 21 1,431 450 1,881
Revisions of previous estimates (2) 1 1 (2) (2) 3 23 4 27
Improved recovery - - - - - - - - -
Purchases of minerals
in place - 24** - - 24 - 2 4** 6
Sales of minerals in place (22) (19) - - (41) - (115) (248) (363)
Extensions and discoveries 6 - 4 19 29 - 188 - 188
Production (17) (20) (5) (2) (44) (3) (196) (23) (219)
--- --- -- --- --- --- ----- --- -----
BALANCE AT
DECEMBER 31, 1994 203 174 37 39 453 21 1,333 187 1,520
=== === == === === === ===== === =====
PROVED DEVELOPED RESERVES AT
DECEMBER 31
1991 212 89 27 6 334 57 1,351 155 1,506
1992 175 76 27 3 281 20 1,069 121 1,190
1993 156 85 26 5 272 16 1,010 95 1,105
1994 130 112 24 7 273 16 907 143 1,050
<FN>
* Natural gas reserve volumes include liquefiable hydrocarbons approximating
5 percent of total gas reserves which are recoverable at natural gas
processing plants downstream from the lease or field separation facilities.
Such recoverable liquids also have been included in natural gas liquids
reserve volumes.
** Represents reserves received in the asset exchange. These amounts have
been excluded in calculating FD&A and reserve replacement (see Note 17).
</TABLE>
44
<PAGE>
STANDARDIZED MEASURE
The standardized measure of discounted future net cash flows from
estimated production of proved oil and gas reserves after income taxes is
presented in accordance with the provisions of SFAS No. 69, "Disclosures
about Oil and Gas Producing Activities" (SFAS No. 69). In computing this
data, assumptions other than those mandated by SFAS No. 69 could produce
substantially different results. The Company cautions against viewing this
information as a forecast of future economic conditions or revenues.
The standardized measure has been prepared assuming year-end selling
prices adjusted for future fixed and determinable contractual price changes,
year-end development and production costs, year-end statutory tax rates
adjusted for future tax rates already legislated and a ten percent annual
discount rate. The year end realized prices were $15.31, $11.75 and $17.13
per barrel of oil and $1.82, $2.03 and $1.99 per mcf of gas for 1994, 1993
and 1992.
<TABLE>
<CAPTION>
UNITED UNITED OTHER
STATES KINGDOM INDONESIA FOREIGN TOTAL
------ ------- --------- ------- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
1994
Future cash inflows $ 5,729 $ 3,631 $ 609 $ 531 $10,500
Future production and development costs (2,950) (2,627) (502) (392) (6,471)
Future income tax expenses (847) (80) (44) (26) (997)
------- ------- ----- ----- -------
Future net cash flows 1,932 924 63 113 3,032
Discount at 10 percent (689) (240) (13) (60) (1,002)
------- ------- ----- ----- -------
Standardized measure $ 1,243 $ 684 $ 50 $ 53 $ 2,030
======= ======= ===== ===== =======
1993
Future cash inflows $ 5,802 $ 3,755 $ 461 $ 259 $10,277
Future production and development costs (3,652) (2,885) (403) (190) (7,130)
Future income tax expenses (579) (116) (27) (10) (732)
------- ------- ----- ----- -------
Future net cash flows 1,571 754 31 59 2,415
Discount at 10 percent (642) (307) (11) (27) (987)
------- ------- ----- ----- -------
Standardized measure $ 929 $ 447 $ 20 $ 32 $ 1,428
======= ======= ===== ===== =======
</TABLE>
SUMMARY OF CHANGES IN THE STANDARDIZED MEASURE
<TABLE>
<CAPTION>
1994 1993 1992
------ ------- -------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Balance, beginning of year $1,428 $ 2,408 $ 2,875
Increase (decrease) in discounted future net
cash flows:
Sales of oil and gas production, net of
related costs (596) (606) (746)
Revisions to estimates of proved reserves:
Prices 1,040 (1,389) (245)
Development costs 390 3 (267)
Production costs (865) 99 534
Quantities 14 - (66)
Other 292 (89) (467)
Extensions, discoveries and improved recovery,
less related costs 233 111 282
Development costs incurred during the period 219 321 303
Purchases of reserves in place 89 53 -
Sales of reserves in place (83) (59) (430)
Accretion of discount 177 298 371
Income taxes (308) 278 264
------ ------- -------
Balance, end of year $2,030 $ 1,428 $ 2,408
====== ======= =======
</TABLE>
45
<PAGE>
ORYX ENERGY COMPANY
QUARTERLY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
-------- ------- ------------ ----------- -----
(MILLIONS OF DOLLARS EXCEPT, PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Revenue:
1994
As reported $ 260 $ 255 $271
Restatement of other revenues
for accounting change - - 2
------- ----- ----
As restated $ 260 $ 255 $273 $284 $ 1,072
======= ===== ==== ==== =======
1993 $ 283 $ 278 $264 $229 $ 1,054
======= ===== ==== ==== =======
Gross profit:*
1994 $ 50 $ 53 $ 45 $ 76 $ 224
======= ===== ==== ==== =======
1993 $ 45 $ 64 $ 31 $ (1) $ 139
======= ===== ==== ==== =======
Net income (loss):**
1994
As reported
Before extraordinary item $ (140) $ (41) $(44)
Extraordinary item - - (12)
------- ----- ----
$ (140) $ (41) $(56)
======= ===== ====
As restated
Before extraordinary item and
cumulative effect of
accounting change $ (60) $ (7) $ (12) $ 14 $ (65)
Extraordinary item - - (12) - (12)
Cumulative effect of
accounting change (948) - - - (948)
------- ----- ----- ---- -------
$(1,008) $ (7) $ (24) $ 14 $(1,025)
======= ===== ===== ==== =======
1993
Before extraordinary item $ (7) $ 4 $ (45) $(45) $ (93)
Extraordinary item - - - (7) (7)
------- ----- ----- ---- -------
Net income (loss) $ (7) $ 4 $ (45) $(52) $ (100)
======= ===== ===== ==== =======
Net income (loss) per share of
common stock:**
1994
As reported
Before extraordinary item $ (1.44) $(.43) $(.45)
Extraordinary item - - (.12)
------- ----- -----
$ (1.44) $(.43) $(.57)
======= ===== =====
As restated
Before extraordinary item and
cumulative effect of
accounting change $ (.62) $(.08) $(.13) $ .14 $ (.68)
Extraordinary item - - (.12) - (.12)
Cumulative effect of
accounting change (9.77) - - - (9.73)
------- ----- ----- ----- -------
$(10.39) $(.08) $(.25) $ .14 $(10.53)
======= ===== ===== ===== =======
1993
Before extraordinary item $ (.08) $ .03 $(.48) $(.48) $ (1.01)
Extraordinary item - - - (.07) (.07)
------- ---- ----- ----- -------
Net income (loss) $ (.08) $ .03 $(.48) $(.55) $ (1.08)
======= ===== ===== ===== =======
<FN>
* Gross profit equals oil and gas revenues plus gas plant margins less
production cost, exploration cost and depreciation, depletion and
amortization.
** See Notes 1 and 7.
</TABLE>
46
<PAGE>
MARKET FOR ORYX ENERGY COMMON STOCK AND RELATED SECURITY MATTERS
The common stock, $1 par value, of the Company trades on the New York Stock
Exchange under the symbol "ORX". The following table sets forth the high and
low sales prices, as reported on the New York Stock Exchange Composite
Transactions quotations, and the dividends paid for the periods indicated:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
1994:
First quarter $20 $15 7/8 $ -
Second quarter $18 1/4 $14 3/8 $ -
Third quarter $16 $13 7/8 $ -
Fourth quarter $15 1/8 $10 5/8 $ -
1993:
First quarter $24 $17 1/4 $.10
Second quarter $24 7/8 $20 $.10
Third quarter $24 3/4 $19 3/8 $.10
Fourth quarter $26 1/4 $16 1/4 $.10
</TABLE>
The Company had 36,811 holders of record of Common Stock as of February 17,
1995.
48
<PAGE>
EXHIBIT 16
To the Board of Directors, Oryx Energy Company:
We are providing this letter to you for inclusion as an exhibit to your Form
10-K filing pursuant to Item 601 of Regulation S-K.
We have read management's justification for the change in accounting method
for assessing the impairment of proved oil and gas properties from a
world-wide basis to a field-by-field basis contained in the Company's Form
10-K for the year ended December 31, 1994. Based on our reading of the data
and discussions with Company officials of the business judgment and business
planning factors relating to the change, we believe management's justification
to be reasonable. Accordingly, in reliance on management's determination as
regards elements of business judgment and business planning, we concur that
the newly adopted accounting principle described above is preferable in the
Company's circumstances to the method previously applied.
Coopers & Lybrand L.L.P.
February 19, 1995
Dallas, Texas
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Form S-8 registration
statements of the Oryx Energy Company Long-Term Incentive Plan (File No.
33-25032), the Oryx Energy Company Capital Accumulation Plan (File No.
33-24918), the Oryx Energy Company 1992 Long-Term Incentive Plan (File No.
33-42695) and the Form S-3 registration statements of Oryx Energy Company (File
No.'s 33-33361, 33-36799 and 33-45611), of our report dated February 19, 1995,
on our audit of the consolidated financial statements of Oryx Energy Company and
its Subsidiaries as of December 31, 1994 and 1993 and for each of the three
years in the period ended December 31, 1994, which report is incorporated by
reference in this Form 10-K from page 41 of the Oryx Energy Company 1994 Annual
Report to Shareholders.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
March 22, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Keiser and Edward W. Moneypenny, and
each of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities to sign the Annual Report of Oryx Energy Company for the
fiscal year ended December 31, 1994 on Form 10-K pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 and any or all amendments to the Annual
Report and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
----------------------------------- ------------------------ ----------------
/S/ ROBERT L. KEISER Chairman of the Board, March 2, 1995
----------------------------------- Chief Executive
(Robert L. Keiser) Officer, President, and
Director (principal
executive officer)
/s/ EDWARD W. MONEYPENNY Executive Vice March 2, 1995
----------------------------------- President, Finance,
(Edward W. Moneypenny) Chief Financial
Officer, and Director
(principal financial
officer)
/s/ JERRY W. BOX Executive Vice March 2, 1995
----------------------------------- President, Exploration
(Jerry W. Box) and Production and
Director
/s/ ROBERT L. THOMPSON Comptroller and March 2, 1995
----------------------------------- Corporate Planning
(Robert L. Thompson) Director (principal
accounting officer)
/s/ WILLIAM E. BRADFORD Director March 2, 1995
-----------------------------------
(William E. Bradford)
/s/ CAROL E. DINKINS Director March 2, 1995
-----------------------------------
(Carol E. Dinkins)
/s/ ROBERT B. GILL Director March 2, 1995
-----------------------------------
(Robert B. Gill)
<PAGE>
SIGNATURE TITLE DATE
----------------------------------- ------------------------ ----------------
/s/ DAVID S. HOLLINGSWORTH Director March 2, 1995
-----------------------------------
(David S. Hollingsworth)
/s/ CHARLES H. PISTOR, JR. Director March 2, 1995
-----------------------------------
(Charles H. Pistor, Jr.)
/s/ PAUL R. SEEGERS Director March 2, 1995
-----------------------------------
(Paul R. Seegers)
/s/ IAN L. WHITE-THOMSON Director March 2, 1995
-----------------------------------
(Ian L. White-Thomson)
