<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ORYX ENERGY COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[ORYX LOGO APPEARS HERE]
ORYX ENERGY COMPANY
13155 NOEL ROAD
DALLAS, TEXAS 75240-5067
NOTICE OF ANNUAL MEETING
March 27, 1996
The 1996 Annual Meeting of Stockholders of Oryx Energy Company will be held
in the Lakewood Room I & II of Cityplace Conference Center, 2711 North
Haskell, Dallas, Texas, on Thursday, May 2, 1996, at 9:00 a.m., for the
following purposes:
1. Election of three directors to Class II of the Company's Board of
Directors;
2. Approval of the appointment of independent accountants for 1996;
3. Approval of the Equity and Deferred Compensation Plan for Non-
Employee Directors;
4. Approval of the Executive Variable Incentive Plan for executive
employees; and
5. To transact such other business as may properly come before the
Annual Meeting, including acting upon stockholder proposals.
Only stockholders of record at the close of business on March 11, 1996, will
be entitled to vote at the Annual Meeting or any adjournments thereof. A
complete list of such stockholders will be available for examination at the
offices of the Company in Dallas, Texas, during ordinary business hours for a
period of 10 days prior to the meeting.
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED. ADMISSION TICKETS WILL BE REQUIRED. IF YOU PLAN TO
ATTEND THE MEETING, PLEASE MARK YOUR CARD IN THE SPACE
PROVIDED. AN ADMISSION TICKET IS ATTACHED TO THE
LOWER PORTION OF THE PROXY CARD.
By Order of the Board of
Directors
William C. Lemmer
Vice President, General Counsel
and Secretary
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CONTENTS PAGE
- -------------------------------------------------------------------------------
<S> <C>
Proxy Statement 1
- -------------------------------------------------------------------------------
Voting Securities 1
- -------------------------------------------------------------------------------
Voting Procedures 1
- -------------------------------------------------------------------------------
Voting Tabulation 1
- -------------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners 2
- -------------------------------------------------------------------------------
Election of Directors
. Item Number 1 on Proxy Card 3
- -------------------------------------------------------------------------------
Information Concerning the Board of Directors 6
- -------------------------------------------------------------------------------
Security Ownership of Management 8
- -------------------------------------------------------------------------------
Executive Compensation 9
- -------------------------------------------------------------------------------
Approval of Independent Accountants
. Item Number 2 on Proxy Card 19
- -------------------------------------------------------------------------------
Approval of Equity and Deferred Compensation Plan for Non-Employee
Directors
. Item Number 3 on Proxy Card 19
- -------------------------------------------------------------------------------
Approval of Executive Variable Incentive Plan
. Item Number 4 on Proxy Card 23
- -------------------------------------------------------------------------------
Proposals of Stockholders
. Items Number 5 and 6 on Proxy Card 25
- -------------------------------------------------------------------------------
Other Business 28
- -------------------------------------------------------------------------------
Section 16(a) Reporting Delinquencies 28
- -------------------------------------------------------------------------------
Stockholder Nominations and Proposals for the 1997 Annual Meeting 28
- -------------------------------------------------------------------------------
Solicitation of Proxies 29
- -------------------------------------------------------------------------------
Equity and Deferred Compensation Plan for Non-Employee Directors A-1
- -------------------------------------------------------------------------------
Executive Variable Incentive Plan ("Executive VIP") B-1
- -------------------------------------------------------------------------------
</TABLE>
. Items scheduled to be voted on at the Annual Meeting.
<PAGE>
PROXY STATEMENT
---------------------------------------------------------
This Proxy Statement and the accompanying proxy/voting instruction card (the
"proxy card") are being furnished to stockholders of Oryx Energy Company
("Company") in connection with the solicitation by the Company's Board of
Directors ("Board") of proxies to be used at the 1996 Annual Meeting of
Stockholders to be held on May 2, 1996, or any adjournments thereof
("Meeting"). The approximate date of mailing of this Proxy Statement and
accompanying proxy card is March 27, 1996.
VOTING SECURITIES
--------------------------------------------------------
The only outstanding voting security of the Company is common stock, $1 par
value ("Common Stock"). On March 11, 1996, the record date for the Meeting,
there were 104,566,704 shares of Common Stock outstanding and entitled to be
voted at the Meeting. Each such share of Common Stock is entitled to one vote.
In addition, there were 3,001,876 outstanding shares of Common Stock held by a
subsidiary of the Company which shares, under Delaware law, are not entitled
to be voted at the Meeting. A majority of the shares of Common Stock
outstanding and entitled to be voted at the Meeting, present in person or
represented by proxy, is necessary to constitute a quorum.
VOTING PROCEDURES
-------------------------------------------------------
The accompanying proxy card serves to appoint proxies for record holders of
Common Stock or to give voting instructions to the trustees of the Oryx Energy
Company Capital Accumulation Plan ("CAP") by plan participants.
If a properly signed proxy card is returned by a record holder which
specifies how the shares of Common Stock represented thereby are to be voted
with respect to any of the items thereon ("Items"), the shares will be voted
in accordance with these specifications. If a properly signed proxy card is
returned by a record holder which does not specify how the shares are to be
voted on any Item, the shares will be voted as recommended by the Board with
respect to that Item.
If a properly signed proxy card is returned by a plan participant which
specifies how shares of Common Stock in CAP are to be voted with respect to
any Item, the shares will be voted in accordance with these specifications. If
a properly signed proxy card is returned by a plan participant which does not
specify how the shares are to be voted on any Item, the trustees will vote
those shares, in accordance with the terms of CAP, in the same proportion as
the shares for which instructions have been received from other participants
in the same fund. UNALLOCATED SHARES OF COMMON STOCK IN FUND L OF CAP WILL BE
VOTED IN THE SAME PROPORTION AS THE ALLOCATED SHARES. IF A PLAN PARTICIPANT
DOES NOT WISH TO ASSUME THE RESPONSIBILITY OF GIVING VOTING INSTRUCTIONS WITH
RESPECT TO UNALLOCATED SHARES, SUCH PARTICIPANT MAY AVOID THIS RESPONSIBILITY
BY NOT SIGNING AND RETURNING A PROXY CARD.
VOTING TABULATION
-------------------------------------------------------
The Company has a confidential voting policy which provides that all votes
will be kept confidential and will not be disclosed to the Company, its
affiliates, directors, officers or employees except when disclosure is
expressly requested by a stockholder (whether by written comment on proxy
cards or otherwise), in the case of a contested proxy solicitation or in the
event disclosure is required by law. As part of the policy, the Company will
employ an independent tabulator to receive and tabulate the proxies and will
appoint one or more independent inspectors of election to act at the Meeting
and to make a written report thereof.
Prior to the Meeting, the tabulator and inspectors will sign an oath to
perform their duties in an impartial manner and according to the best of their
ability. The inspectors will ascertain the number of shares outstanding and
the voting power of each, determine the shares represented at the Meeting and
the validity of proxies and ballots, count all votes and ballots and perform
certain other duties as required by law.
Stockholders who return properly signed proxy cards will have the number of
shares of Common Stock represented by such proxy cards counted as "present"
for purposes of establishing a quorum and determining the number of votes
needed for approval of all Items before the Meeting other than election of
directors. Any stockholder who returns the proxy card but who does not desire
to vote and wishes to record this fact may abstain from voting by marking the
appropriate space on the proxy card. However, proxy cards marked as
1
<PAGE>
abstaining and proxy cards containing broker non-votes will be counted as
present for both the purpose of establishing a quorum and determining the
number of votes needed for approval of all Items before the Meeting other than
the election of directors.
With respect to the election of directors, under Delaware law directors are
elected by a plurality of the votes of shares of Common Stock cast, provided a
quorum is present. Votes withheld and shares not voted will have no effect on
the vote. With regard to the other Items to be voted on, under Delaware law
and the Company's Bylaws, approval requires the affirmative vote of the
majority of the shares present in person or represented by proxy at the
Meeting. Abstentions on these Items will have the effect of a negative vote
since they require the affirmative vote of a majority of shares present in
person or represented by proxy at the Meeting in order to be approved. Under
the rules of the New York Stock Exchange, brokers who hold shares in street
name have discretionary authority to vote on certain items when they have not
received instructions from beneficial owners. Brokers who do not receive
instructions are therefore entitled to vote on the election of directors, the
appointment of independent accountants and the approval of the Equity and
Deferred Compensation Plan for Non-Employee Directors and the Executive
Variable Incentive Plan. With respect to the stockholder proposals, however,
brokers may not vote shares held for customers without specific instructions
from the customer. Any resulting broker non-vote will have the effect of a
negative vote since these Items require the affirmative vote of a majority of
the shares present in person or represented by proxy at the Meeting in order
to be approved.
Any stockholder giving a proxy may revoke it at any time before it is voted
by communicating such revocation in writing to the Secretary of the Company or
by executing and delivering a later-dated proxy. Attendance at the Meeting
will not be effective to revoke the proxy unless written notice of revocation
also has been given to the Secretary of the Meeting before the voting of the
proxy.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
----------------
The following stockholders are the only persons known by the Company to have
been the beneficial owners of more than five percent of the Common Stock
outstanding and entitled to be voted at the Meeting as of December 31, 1995:
<TABLE>
<CAPTION>
Shares of Percent of
Common Common
Name and Address Stock Stock
- --------------------------------------------------------------------------------
<S> <C> <C>
Wellington Management Company (1)....................... 10,082,700 9.7
75 State Street
Boston, Massachusetts 02109
The Prudential Insurance Company of America (2)......... 6,932,924 6.7
Prudential Plaza
Newark, New Jersey 70102-3777
</TABLE>
(1) The information relating to the Wellington Management Company
("Wellington") was obtained from Schedule 13G dated January 31, 1996 filed
by that company with respect to its ownership of Company securities as of
December 31, 1995. No single Wellington investment advisory client, other
than Vanguard/Windsor Fund, Inc. ("Vanguard/Windsor"), owns more than five
percent of the outstanding Common Stock. The Schedule 13G dated February
2, 1996 filed by Vanguard/Windsor indicates it is the beneficial owner of
6,533,000 or 6.3 percent of the outstanding Common Stock. Vanguard/Windsor
has sole voting power and shared dispositive power with respect to the
entire 6,533,000 shares of Common Stock. Wellington's voting and
dispositive power consist of the following: zero shares with sole and
2,040,000 shares with shared voting power, and zero shares with sole and
10,082,700 with shared dispositive power.
(2) The information relating to The Prudential Insurance Company of America
("Prudential") was obtained from Schedule 13G dated February 12, 1996
filed by that company with respect to its ownership of Company securities
as of December 31, 1995. Prudential holds 86,500 shares of Common Stock
for the benefit of its general account. In addition, Prudential may have
direct or indirect voting and/or investment discretion over 6,846,424
shares which are held for the benefit of its clients by its separate
accounts, externally managed accounts, registered investment companies,
subsidiaries and/or other affiliates. This amount includes convertible
bonds convertible into 226,810 shares of Common Stock. Prudential's voting
and dispositive power consist of the following: 1,465,396 shares with sole
and 5,192,118 shares with shared voting power, and 1,465,396 shares with
sole and 5,240,718 shares with shared dispositive power.
2
<PAGE>
ELECTION OF DIRECTORS
--------------------------------------------------
ITEM NUMBER 1 ON PROXY CARD
The Company's Certificate of Incorporation has established three classes of
directors, so that approximately one-third of the Board is elected each year.
The terms of the Class II directors expire at the Meeting. The three current
Class II directors are: Robert L. Keiser, Paul R. Seegers and Ian L. White-
Thomson.
The Board has nominated Messrs. Keiser, Seegers and White-Thomson for re-
election as Class II directors. The terms of these Class II directors, if
elected, will expire on the date of the Annual Meeting of Stockholders in
1999, or at such time as their successors are elected and qualified. The
directors will be elected by a plurality of the shares of Common Stock present
in person or represented by proxy at the Meeting and entitled to vote.
If any of the nominees is not elected or is unable to serve (although such a
contingency is not expected), the remaining Board members may elect a
substitute or, alternatively, may reduce the size of the Board, all in
accordance with the Company's Bylaws. All current directors are described
below, in order of their classification.
- -------------------------------------------------------------------------------
CLASS II -- TERM EXPIRES 1999 (IF ELECTED)
- -------------------------------------------------------------------------------
ROBERT L. KEISER (Director since 1991) Chairman of the Board,
[PHOTO OF Chief Executive Officer and President since December 1, 1994.
ROBERT L. Age 53. President and Chief Operating Officer of the Company
KEISER from January 1, 1992 until November 30, 1994. Mr. Keiser was
APPEARS HERE] President and Chief Executive Officer of Oryx U.K. Energy
Company from January 1, 1990 through December 1991. 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.
- -------------------------------------------------------------------------------
PAUL R. SEEGERS (Director since 1990) President of Seegers
Enterprises. Age 66. Chairman of the Board of Centex
Corporation from July 1988 until his retirement in July 1991.
From July 1985 to July 1988, he was also its Chief Executive
[PHOTO OF Officer, and from July 1978 to July 1985 its Vice Chairman and
PAUL R. Co-Chief Executive Officer. Mr. Seegers is a member of the
SEEGERS board of directors of Centex Corporation and Chairman of its
APPEARS HERE] Executive Committee and is a member of the board of directors
of RAC Financial Group, Inc. He is a member of the Board of
Methodist Hospitals of Dallas and a trustee of Southwestern
Medical Foundation.
- -------------------------------------------------------------------------------
IAN L. WHITE-THOMSON (Director since 1993) President and Chief
Executive Officer of U.S. Borax Inc. since 1988 and since
April 1, 1995, Chief Executive of the global RTZ Borax Group.
[PHOTO OF Age 59. Prior to 1988 he was Vice President, Marketing and
IAN L. then Executive Vice President of the same company. Mr. White-
WHITE-THOMSON Thomson has been a director of U.S. Borax Inc. since 1973.
APPEARS HERE] During 1985 and 1986 he was Group Executive of Pennsylvania
Glass Sand Corporation and Ottawa Silica Company, newly
acquired subsidiaries of U.S. Borax Inc., and organized their
combination as U.S. Silica, of which company he was Group
Executive in 1987. Mr. White-Thomson has been a director of
the American Mining Congress since 1989 and he has previously
served as a director and held several positions, including
Chairman, of the Chemical Industry Council of California. He
is a director of KCET Community Television of Southern
California. He was born and educated in England and became a
U.S. citizen in 1982.
3
<PAGE>
- -------------------------------------------------------------------------------
CLASS III -- TERM EXPIRES 1997
- -------------------------------------------------------------------------------
JERRY W. BOX (Director since 1994) Executive Vice President
[PHOTO OF and Chief Operating Officer since December 1995. Age 57. Mr.
JERRY W. Box held the position of Executive Vice President, Exploration
BOX and Production from December 1994 to November 1995. From
APPEARS HERE] January 1992 through November 1994, he was Senior Vice
President, Exploration and Production, and he was Vice
President, Exploration from January 1987 through December
1991.
- -------------------------------------------------------------------------------
WILLIAM E. BRADFORD (Director since 1993) President and Chief
Executive Officer of Dresser Industries, Inc., since November
1995 and a director of Dresser Industries, Inc. since March
[PHOTO OF 1992. Age 61. Mr. Bradford served as President and Chief
WILLIAM E. Operating Officer of Dresser Industries, Inc. from March 1992
BRADFORD to November 1995. Mr. Bradford was President and Chief
APPEARS HERE] Executive Officer of Dresser-Rand Company from February 1988
to March 1992. From March 1982 to March 1992 he was Senior
Vice President of Operations of Dresser Industries, Inc. Mr.
Bradford is a director of Diamond Shamrock, Inc.
- -------------------------------------------------------------------------------
EDWARD W. MONEYPENNY (Director since 1994) Executive Vice
President, Finance, and Chief Financial Officer since December
[PHOTO OF 1, 1994. Age 54. Senior Vice President, Finance, and Chief
EDWARD W. Financial Officer from January 1992 through November 1994 and
MONEYPENNY Vice President, Finance and Chief Financial Officer from
APPEARS HERE] November 1988 through December 1991. He serves on the Board of
MESBIC Ventures Holding Company and is a member of the
Business Advisory Council, College of Commerce and Business
Administration, University of Illinois.
- -------------------------------------------------------------------------------
4
<PAGE>
- -------------------------------------------------------------------------------
CLASS I -- TERM EXPIRES 1998
- -------------------------------------------------------------------------------
ROBERT B. GILL (Director since 1989) Vice Chairman of the
Board of J. C. Penney Company, Inc. from 1982 and Chief
[PHOTO OF Operating Officer of J. C. Penney Stores and Catalog from
ROBERT B. March 1, 1990 until his retirement on July 1, 1992. Age 64.
GILL Prior to his retirement from J. C. Penney, he served as
APPEARS HERE] Chairman of the Board of the J. C. Penney National Bank and
the J. C. Penney Insurance Company. He was a director of the
National Junior Achievement, Chairman of the Board of Trustees
of the National 4-H Council and a member of the board of
directors of the U.S. Chamber of Commerce. He currently is a
Trustee of Pace University and a member of the Business
Advisory Committee at Lehigh University.
- -------------------------------------------------------------------------------
DAVID S. HOLLINGSWORTH (Director since 1988) Chairman of the
[PHOTO OF Board and Chief Executive Officer of Hercules Incorporated
DAVID S. from 1987 until his retirement on December 31, 1990. Age 67.
HOLLINGSWORTH From 1986 to 1987, Mr. Hollingsworth was Vice Chairman of the
APPEARS HERE] same company. Previously, he was Vice President with various
responsibilities, including corporate planning and marketing.
Prior to his retirement, Mr. Hollingsworth was a member of the
board of directors of the U.S. Chamber of Commerce. He was
also a member of the board and the executive committee of both
the Chemical Manufacturers Association and the Medical Center
of Delaware and a member of the Delaware Business Roundtable.
Mr. Hollingsworth is a member of the board of directors of the
Delaware Trust Company.
- -------------------------------------------------------------------------------
CHARLES H. PISTOR, JR. (Director since 1988) Former Vice Chair
of Southern Methodist University from October 1991 to
[PHOTO OF September 1995. Age 65. Mr. Pistor was Chairman of the Board
CHARLES H. and Chief Executive Officer of NorthPark National Bank from
PISTOR, JR. 1988 to June 1990. He retired as Vice Chairman of First
APPEARS HERE] RepublicBank Corporation, and Chairman and Chief Executive
Officer of First RepublicBank Dallas, N.A. in April 1988.
Before that time, he was Chairman of the Board and Chief
Executive Officer of RepublicBank Dallas, N.A. Mr. Pistor is a
past-president of the American Bankers Association. Mr. Pistor
also serves as a director of AMR Corporation, American Brands,
Inc. and Centex Corporation. He is a member of the Executive
Board of the Cox School of Business at Southern Methodist
University.
- -------------------------------------------------------------------------------
5
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
-----------------
BOARD MEETINGS AND COMMITTEES
The Board held 13 meetings in 1995. The permanent committees of the Board,
number of meetings held in 1995, current composition and functions are:
AUDIT COMMITTEE (THREE MEETINGS) -- Paul R. Seegers, Chairman; William E.
Bradford; Robert B. Gill; and Ian L. White-Thomson -- examines the Company's
accounting processes, financial controls and reporting systems; and assesses
the performance and recommends the appointment of independent accountants.
BOARD POLICY AND NOMINATING COMMITTEE (THREE MEETINGS) -- Charles H. Pistor,
Jr., Chairman; William E. Bradford; and Paul R. Seegers -- responsible for
corporate governance processes and Board practices; reviews the role,
composition and structure of the Board and its committees; recommends nominees
for election to the Board; initiates the review of Board performance and
reviews the performance of the Chairman and Chief Executive Officer; and
oversees planning for the succession to senior executive positions.
COMPENSATION COMMITTEE (FOUR MEETINGS) -- David S. Hollingsworth, Chairman;
Robert B. Gill; and Ian L. White-Thomson -- supervises and administers the
compensation and benefit policies, practices and plans of the Company.
EXECUTIVE COMMITTEE (NO MEETINGS) -- Robert L. Keiser, Chairman; Jerry W.
Box; Edward W. Moneypenny; and Charles H. Pistor, Jr. -- exercises the
authority of the Board during the intervals between meetings of the Board.
MLP COMMITTEE (FOUR MEETINGS) -- Jerry W. Box; Robert L. Keiser; and Edward
W. Moneypenny -- determines the frequency and amount of funding of Sun Energy
Partners, L.P.; and determines the frequency and amount of cash distributions
to be made by Sun Energy Partners, L.P. and the record dates of such
distributions.
During 1995 the directors attended 95 percent of Board and committee
meetings.
STOCK OWNERSHIP GUIDELINES FOR NON-EMPLOYEE DIRECTORS
The Company established stock ownership guidelines for its non-employee
directors in 1995. These voluntary guidelines were established to further
enhance the "stakeholder" interest of the directors in the Company and thus
more closely align their interests with those of stockholders. Under the
guidelines, non-employee directors are encouraged to own within a three-year
period Common Stock having an aggregate market value equal to at least three
times their current annual retainer.
To facilitate achievement of these guidelines, the Company is seeking
stockholder approval of a new Equity and Deferred Compensation Plan for Non-
Employee Directors (the "Directors' Equity Plan"), as described on page 19 of
this Proxy Statement. If approved by stockholders, the Directors' Equity Plan
would require, among other things, that non-employee directors be paid one-
half of their annual retainer in Common Stock and allow them to apply up to
100 percent of their cash compensation to the purchase of Common Stock.
DIRECTORS' COMPENSATION
Directors (other than executive officers of the Company) are paid $24,000
per year plus $4,000 per year for each committee of which they are chairman or
$2,500 per year for each committee of which they are members. These directors
also receive an attendance fee of $1,000 for each Board meeting, committee
meeting or management meeting. Except as set forth in this section, these
directors do not receive remuneration from the Company. Executive officers of
the Company are not paid additional remuneration for their services as
directors.
Under the Directors' Deferred Compensation Plan, a director may elect to
defer all or a portion of his cash compensation from the Company by filing a
written election. All deferred payments commence no earlier than the first day
of any year which is at least one year after the year in which compensation is
earned and no later than the third calendar year following retirement from the
Board. Under this plan, directors may elect to defer compensation into
interest bearing accounts. Deferrals are credited quarterly with interest
equal to the rate of return from the Company's CAP Stable Value Fund. Prior to
May 1, 1991, directors were also permitted to defer into accounts which were
treated as if they were invested in shares of Common Stock. All payments for
share
6
<PAGE>
units are made in cash based upon the market value of Common Stock at the time
of payment. Under the Directors' Equity Plan, the Directors' Deferred
Compensation Plan would be terminated effective as of July 1, 1996. Upon
termination of this plan, all cash units and share units credited to the
accounts of directors thereunder will be transferred and credited to accounts
established for such directors under the Directors' Equity Plan. See "Approval
of Equity and Deferred Compensation Plan for Non-Employee Directors".
The Non-Employee Directors' Retirement Plan provides for a retirement
benefit to directors who are not officers, present employees or former
employees of the Company or any of its affiliates and who served on the Board
for at least five years. The retirement benefit payable to a director is an
amount equal to ten percent of the annual retainer in effect for the year in
which the director retires from the Board, multiplied by the director's years
of service on the Board up to a maximum of ten. The retirement benefit is
payable on a quarterly basis, starting with the calendar quarter following the
director's retirement from the Board, for the lesser of the number of quarters
equal to the director's years of service multiplied by four, or 60 quarters.
If a director dies before or after the retirement benefit commences, the
director's spouse, if any, at the time of death, will receive 50 percent of
any remaining payments. The Directors' Equity Plan provides that accrued
benefits under the Non-Employee Directors' Retirement Plan will be "frozen"
effective as of July 1, 1996, and as a result, no directors newly elected to
the Board after such date will be entitled to participate in this plan, and
the annual retirement benefit for all directors currently participating in the
plan will be fixed from and after such date so that no future benefits will
accrue. Approval of the Directors' Equity Plan will therefore effectively
terminate the Non-Employee Directors' Retirement Plan on July 1, 1996. See
"Approval of Equity and Deferred Compensation Plan for Non-Employee
Directors."
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
----------------------------------
The following table sets forth, as of December 31, 1995, the number of
shares of Common Stock beneficially owned (as defined by the Securities and
Exchange Commission ("SEC")) by each current director, by each executive
officer named in the Summary Compensation Table included herein who is not
also a director and by all directors and executive officers as a group. All
directors and executive officers as a group beneficially owned at such date
less than one percent of the outstanding Common Stock. For information
regarding guidelines on stock ownership of directors and executive officers
recently adopted by the Board, see "Information Concerning the Board of
Directors -- Stock Ownership Guidelines for Non-Employee Directors" and
"Executive Compensation -- Compensation Committee Report on Executive
Compensation -- Stock Ownership Guidelines". No director or executive officer
beneficially owns any of the 7 1/2% Convertible Subordinated Debentures Due
2014 of the Company or, except as noted in footnote 6 below, any depository
units of Sun Energy Partners, L.P. ("Partnership Units") for which the Company
acts as Managing General Partner.
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Name Owned (1)
- ------------------------------------------------------------------------------
<S> <C>
Directors:
Jerry W. Box (2)(3)............................................ 137,732
William E. Bradford............................................ 1,500
Robert B. Gill................................................. 4,000
David S. Hollingsworth......................................... 2,000
Robert L. Keiser (2)(3)....................................... 251,417
Edward W. Moneypenny (2)(3).................................... 120,995
Charles H. Pistor, Jr. ........................................ 1,000
Paul R. Seegers................................................ 8,000
Ian L. White-Thomson (4)....................................... 2,000
Executive Officers Named in the Summary Compensation Table
Other Than Those Listed Above:
Frances G. Heartwell (2)(3)(5)................................. 22,659
William C. Lemmer (2)(3)....................................... 29,939
William P. Stokes, Jr. (2)(6).................................. 89,035
All directors and executive officers as a group
(15 persons including those named above) (2)(3)(4)(5)......... 735,067
</TABLE>
(1) As defined by the SEC, securities beneficially owned include: securities
that the above persons have the right to acquire at any time within 60
days after December 31, 1995, such as through the exercise of any option
or right or pursuant to an incentive award; securities directly or
indirectly held by the above persons or by certain members of their
families for which the above persons have sole or shared voting or
investment power; and shares of Common Stock held on behalf of the above
persons in the Company's CAP.
(2) The amounts shown include shares of Common Stock which the following
persons had the right to acquire within 60 days after December 31, 1995
through the exercise of options or pursuant to incentive awards under the
Company's long-term incentive plans: J.W. Box -- 121,964 shares; F. G.
Heartwell -- 16,954 shares; R.L. Keiser -- 150,082 shares; W. C. Lemmer --
19,084 shares ; E.W. Moneypenny -- 114,231 shares; W.P. Stokes -- 83,028
shares; and all directors and executive officers of the Company as a
group -- 556,684 shares.
(3) Includes the following number of shares of restricted stock awarded
effective January 2, 1996 under the terms of the Company's long-term
incentive plan: J.W. Box -- 3,287 shares; F. G. Heartwell -- 1,340 shares;
R.L. Keiser -- 38,444 shares; W. C. Lemmer -- 1,483 shares; E.W.
Moneypenny -- 3,190 shares; and all directors and executive officers of
the Company as a group -- 47,744 shares.
(4) The amount shown includes 1,000 shares purchased March 12, 1996.
(5) The amount shown includes 2,271 shares purchased under the Company's CAP
on January 12, 1996.
(6) W. P. Stokes owns 2,000 Partnership Units.
8
<PAGE>
EXECUTIVE COMPENSATION
------------------------------------------------
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
To the Stockholders
Oryx Energy Company:
COMPENSATION PHILOSOPHY
The Company's philosophy is that total compensation for its Chief Executive
Officer ("Chairman/CEO"), and other executives, should be established by the
same process used for its other salaried employees, except that: (1)
executives should have a greater portion of their compensation at risk than
other employees, (2) a large portion of executive compensation should be tied
directly to the performance of the business and (3) executives should share in
the same risks and rewards as do stockholders of the Company.
The Company also believes that executive compensation should be subject to
objective review. For this reason, the Compensation Committee of the Board of
Directors ("Committee") has been established. The Committee is comprised of
three directors, none of whom are employees or former employees of the
Company. Operating within the framework of a mission statement approved by the
Board of Directors, the Committee's role is to assure that: the compensation
strategy of the Company is aligned with the interests of the stockholders; the
Company's compensation structure allows for fair and reasonable base salary
levels; and senior executives have the opportunity to earn short-term and
long-term compensation that reflects both Company and individual performance
as well as industry practice. The Committee utilizes the expertise of
independent compensation consultants in discharging its responsibilities.
STOCK OWNERSHIP GUIDELINES
To further support a key objective of the Company's stated compensation
philosophy, namely that of aligning the interests of executives with those of
stockholders, the Company established voluntary stock ownership guidelines for
its executive officers at the level of Vice President and senior in 1995.
Under these guidelines, the Chairman/CEO is expected to own within a five-year
period Common Stock having an aggregate market value equal to at least three
times his current annual base salary and Vice Presidents are expected to own
Common Stock having an aggregate market value equal to at least their
respective current annual base salaries. These stock ownership guidelines
complement those adopted for non-employee directors, as described on page 6 of
this Proxy Statement.
COMPENSATION PROGRAMS AND POLICIES
The Company's executive compensation programs are designed to attract,
motivate, reward and retain executives who are successful in helping the
Company achieve its business objectives. The Company operates in a mature
industry characterized by large capital investments, increasingly demanding
technology, government regulation, highly competitive global operating
environments and long-term investment cycles. Executive compensation programs
of the Company are designed to address these considerations and consist of
three major components:
BASE SALARY: For the Chairman/CEO and other executive officers, base
salary is determined by the level of job responsibility, the
competitiveness of the executives' salaries to the external marketplace and
the degree to which established objectives have been achieved. These three
general factors are not weighted.
It is the Company's practice to set base salary targets for each
executive at levels equivalent to the median (50th percentile) of
comparable oil and gas producers and general industry companies of similar
size, as measured by annual revenues. The Company participates in two
industry-specific surveys of 26 and 29 companies and two general-industry
surveys of 393 and 425 companies. The number of participants in each survey
may vary from year to year as companies change their focus, merge or are
acquired. The results of each survey are weighted equally.
9
<PAGE>
Because of the lack of common performance criteria and the anonymity of
the data gathered, it is not possible to make a meaningful comparison on
the basis of performance of the surveyed companies. Therefore, the
Committee did not consider the performance of the surveyed companies used
to benchmark salaries.
It should be noted that the Company-selected peer group presented in the
performance graph of cumulative total stockholder return on page 17 of this
Proxy Statement is a much smaller group than the one considered appropriate
by the Committee for determining compensation and recruiting executive
talent. However, except for four companies, each of the companies named in
footnote 3 to the performance graph on page 17 of this Proxy Statement is
included in either one or both of the two industry-specific surveys
discussed above.
Once the salary target is established for each executive position, the
Committee sets the actual salary based on its appraisal of the executives'
performance with respect to the goals approved by the Committee for each
individual's area of responsibility. Adjustments to 1995 base salaries for
the executive officers listed in the Summary Compensation Table were based
on 1994 performance and additional functional responsibilities assumed by
certain executives.
ANNUAL INCENTIVES: Annual incentives, if earned, are paid under the terms
of the Variable Incentive Plan ("VIP"). The VIP is available to officers of
the Company and all other regular employees worldwide. The VIP is intended
to highlight crucial business objectives and promote the achievement of
these objectives through individual and team contributions at all levels of
the Company.
The VIP goals and targeted performance levels for each goal are
established by the Committee and recommended to the full Board for final
approval at the beginning of the fiscal year in support of the Company's
annual strategic plan. Recent performance levels of the Company and
expected conditions within the oil and gas industry are taken into account
when goals and target levels are established. The goals for 1995, which
included both operational and financial measures, are as follows: long-term
debt reduction, production volumes, operating and administrative cash
expenses and proved reserve additions. In addition to these goals, certain
senior executives, including all the executive officers listed in the
Summary Compensation Table, had an additional goal of increasing
stockholder value as reflected by the share price of the Common Stock. Each
of these goals was weighted to provide balance appropriate for the year.
VIP payments are made only upon the achievement of targeted objectives
and no payments are made if minimum thresholds are not met. Annual target
incentives for executive officers listed in the Summary Compensation Table
range from 35 to 60 percent of annual base salary. The Committee has
discretion under the VIP to vary payments around targeted amounts, or to
forego payments in full, based upon evaluated performance of each executive
officer and the Company.
The Company is seeking stockholder approval of a new annual incentive
plan, the Executive Variable Incentive Plan ("Executive VIP"), as described
on page 23 of this Proxy Statement. If approved, the Executive VIP will be
effective for 1996 performance and 1997 payments. It will provide
participants the option of taking all or a portion of their annual
incentive awards in restricted Common Stock. The Company believes the
Executive VIP will assist in facilitating the achievement of the stock
ownership guidelines discussed above. The Executive VIP is also intended to
comply with the requirements of Internal Revenue Code Section 162(m) for
"performance-based compensation" which is exempted from the $1 million
deduction limitation.
LONG-TERM INCENTIVES: Long-term incentive awards are designed to more
closely align the interests of executives with those of stockholders. The
current long-term incentive plan was approved by stockholders in 1991 and
authorizes the use of a variety of stock-based forms of compensation. In
1995, long-term incentive awards consisted of nonqualified stock options
exclusively. The grant level to each participant, including the officers
listed in the Summary Compensation Table, was based on survey data provided
by a nationally-recognized consulting firm. The level of grant was targeted
at the 60th percentile of the general industry group which is composed of
304 companies, 13,800 participating individuals and almost 500 long-term
incentive plans. The group of 304 companies consists principally of Fortune
1000 entities which represent a broad cross-section of industries. Due to
the lack of common performance
10
<PAGE>
criteria and the anonymity of the data, no consideration was given to
relative company performance of the surveyed companies in determining long-
term incentive grants.
Stock options represent the right to purchase shares of Common Stock
after a specified future date, not less than one full year from the date of
grant and not more than ten years from the date of grant, at the fair
market price of Common Stock on the date of grant. Unlike cash, the value
of a stock option award will not be immediately realized and will depend on
the market value of the Common Stock over time. The option value ultimately
realized will depend on the continued success of the Company and serves to
provide the executive an incentive for years after it has been awarded.
COMPANY PERFORMANCE AND CHAIRMAN/CEO COMPENSATION
Mr. Keiser was elected Chairman/CEO and President effective December 1,
1994, and his base salary was set at that time based on the increased level of
job responsibility and competitive pay levels. Mr. Keiser received no base
salary increases during 1995.
The Chairman/CEO's annual incentive award under the VIP is based on the
Committee's assessment of the Company's performance in the goal areas as
described above in the discussion on annual incentives. The Committee
determined that Company performance in the four operational and financial goal
areas described above, in the aggregate, exceeded the target. The Committee
also determined that overall performance with respect to the operational,
financial and share price appreciation goals approximated target levels for
1995. The Committee determined Mr. Keiser's annual VIP award for 1995 based on
this assessment and the exercise of its discretion.
The long-term incentive awards for 1995 granted to Mr. Keiser consisted of
stock options exclusively. The level of award was determined to be competitive
at approximately the 60th percentile of general industry based on long-term
incentive expected value tables compiled by a nationally-recognized consulting
firm. Data from the consulting firm survey was used to determine the
appropriate prospective expected value of the stock options as a multiple of
salary for the position. The award was made on the same terms as described
above under "Long-Term Incentives."
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company desires to preserve the tax deductibility of all compensation
paid to its executive officers and believes that all compensation paid to its
executive officers for the year 1995 is fully deductible. The only long-term
incentives granted by the Committee in 1995 qualify as "performance-based
compensation" under Internal Revenue Code Section 162(m). The Committee will
make every effort to preserve the tax deductibility of all executive
compensation, consistent with the interests of the Company. As described
above, the Company is seeking stockholder approval of a new annual incentive
plan, the Executive VIP, which is intended to qualify as performance-based
compensation and thus be exempted from the $1 million deduction limitation.
SUMMARY
We, the members of the Committee, believe that the Company's compensation
policies have been successful in attracting, motivating, rewarding and
retaining qualified executives and in tying compensation to long-term
performance for stockholders. We will continue to monitor the effectiveness
and appropriateness of each of the components to reflect changes in the
business environment.
David S. Hollingsworth, Chairman
Robert B. Gill
Ian L. White-Thomson
11
<PAGE>
The following table sets forth certain summary information concerning the
compensation awarded to, earned by or paid to the Chairman/CEO of the Company
during 1995, each of the four most highly compensated executive officers of
the Company during 1995 other than the Chairman/CEO, and one additional person
who served as an executive officer during 1995 (collectively, the "named
executive officers") for the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------------- ---------------------------------
Awards Payouts
------------------------- -------
Securities
Underlying
Restricted Options/SARs All Other
Name and Other Annual Stock (number of LTIP Compen-
Principal Position Year Salary Bonus (1) Compensation Awards (1) shares) (2)(3) Payouts sation
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Keiser 1995(4) $473,720 $ 0(5) $75,278 $370,494 78,000 $ 0 $34,004
Chairman, Chief 1994 $358,712 $ 0 $20,844 $ 0 72,000 $ 0 $18,814
Executive Officer 1993 $349,128 $ 0 $19,238 $ 0 23,690 $ 0 $21,169
and President
Jerry W. Box 1995(6) $272,324 $102,466 $ 9,802 $ 44,375 42,000 $ 0 $19,261
Executive Vice President 1994 $251,368 $ 0 $ 9,913 $ 0 41,500 $ 0 $11,642
and Chief Operating 1993 $251,368 $ 0 $ 5,833 $ 0 11,830 $ 0 $14,452
Officer
Edward W. Moneypenny 1995(7) $264,264 $ 99,373 $10,010 $ 43,065 42,000 $ 0 $18,382
Executive Vice 1994 $244,400 $ 0 $10,088 $ 0 37,500 $ 0 $11,229
President, Finance, and 1993 $244,400 $ 0 $ 5,317 $ 0 11,830 $ 0 $14,884
Chief Financial Officer
William P. Stokes, Jr. 1995(8) $191,882 $ 65,800 $12,048 $ 0 20,000 $ 0 $11,232
Vice President, 1994 $191,516 $ 0 $ 9,939 $ 0 22,500 $ 0 $ 6,042
Marketing through 1993 $191,516 $ 0 $ 4,843 $ 0 8,220 $ 0 $ 8,586
11/30/95
William C. Lemmer 1995(9) $175,552 $ 46,200 $12,992 $ 20,021 11,000 $ 0 $10,570
Vice President, General 1994 $162,964 $ 0 $ 7,440 $ 0 6,000 $ 0 $ 4,608
Counsel and Secretary
Frances G. Heartwell 1995(10) $142,836 $ 41,785 $ 268 $ 18,090 8,000 $ 0 $ 8,670
Vice President, Human
Resources and
Administration
</TABLE>
(1) The amounts shown in the Bonus column represent the cash amounts awarded
under the Company's Variable Incentive Plan. All named executive officers
serving at December 31, 1995 elected to receive all or part of their
bonus for 1995 in restricted Common Stock rather than cash. The
restricted Common Stock was awarded under the terms of the Company's 1992
Long-Term Incentive Plan and included a 30 percent premium in recognition
of the election to forego cash compensation. The restrictions on the
restricted Common Stock require continued employment (absent a permitted
acceleration event) for a three-year period after which time the
restrictions lapse. The amounts shown in the Restricted Stock Awards
column represent the market value as of January 2, 1996 of the restricted
Common Stock taken in lieu of cash.
(2) Options represent the right to purchase shares of Common Stock at a fixed
price per share and were granted with an equal number of limited rights
and, in 1994 and 1993, a "reload" feature. Limited rights are rights that
become immediately and fully exercisable upon a "change in control" of
the Company and entitle the recipient to receive a cash payment equal to
the excess of the then market price of the Common Stock over the exercise
price of the related option. See footnote 2 to the Option/SAR Grants in
12
<PAGE>
1995 table included elsewhere herein for additional information on option
terms. Options granted in 1994 and 1993 were also granted with a "reload"
feature which permits the recipient to tender shares of Common Stock at
then current market value in payment of the option exercise price and
receive, in addition to the shares of Common Stock purchased upon exercise
of the option, a new option to purchase a number of shares of Common Stock
equal to the number of shares of Common Stock so tendered at the then
current market price per share. A stock appreciation right ("SAR") is a
right attached to a stock option which allows the holder of the option to
be paid, in cash or shares of Common Stock depending upon when the right
is exercised, an amount equal to the appreciation of the underlying Common
Stock in lieu of exercising the option. No SARs were granted during any of
the years presented. The number of options shown does not include certain
contingent options to purchase shares of Common Stock granted in 1993. The
contingent options were granted in tandem with certain performance shares.
These performance shares are payable in cash and/or shares of Common Stock
upon attainment of the performance measure, which is the targeted 30 day
average of closing prices for Common Stock at the end of the restriction
period. If less than the minimum targeted average price is achieved, the
performance shares are canceled. Between the targeted average price and
the minimum targeted average price, pro rata payment is made. Performance
shares were granted in tandem with contingent options to purchase shares
of Common Stock equal to twice the number of performance shares granted,
which contingent options are exercisable only if the related performance
shares are canceled. The contingent stock options were granted with an
equal number of limited rights. During the restriction period, dividend
equivalents are paid on performance shares when, as and if dividends are
declared on the Common Stock by the Board.
(3) The number of options shown does not include the following number of
contingent options awarded to such persons in 1993: R.L. Keiser -- 23,100;
J.W. Box -- 11,240; E.W. Moneypenny -- 11,240; W.P. Stokes -- 7,620;
W.C. Lemmer -- 2,230; and F.G. Heartwell -- 2,230.
(4) At December 31, 1995, Mr. Keiser held an aggregate of 11,550 performance
shares (as described in footnote 2 above) with an aggregate market value
at that date of $154,481. The amount shown as All Other Compensation for
1995 consists of Company contributions to defined contribution plans of
$25,249 ($16,186 in cash and an allocation of 677.64 shares of Common
Stock valued at $9,063 using the December 31, 1995 closing price) and term
life insurance premiums of $8,755.
(5) Mr. Keiser elected to receive 100 percent of his bonus for 1995 in
restricted Common Stock. See footnote 1 above.
(6) At December 31, 1995, Mr. Box held an aggregate of 5,620 performance
shares (as described in footnote 2 above) with an aggregate market value
at that date of $75,168. The amount shown as All Other Compensation for
1995 consists of Company contributions to defined contribution plans of
$14,544 ($6,116 in cash and an allocation of 630.11 shares of Common Stock
valued at $8,428 using the December 31, 1995 closing price) and term life
insurance premiums of $4,717.
(7) At December 31, 1995, Mr. Moneypenny held an aggregate of 5,620
performance shares (as described in footnote 2 above) with an aggregate
market value at that date of $75,168. The amount shown as All Other
Compensation for 1995 consists of Company contributions to defined
contribution plans of $14,108 ($5,713 in cash and an allocation of 627.69
shares of Common Stock valued at $8,395 using the December 31, 1995
closing price) and term life insurance premiums of $4,274.
(8) At December 31, 1995, Mr. Stokes held an aggregate of 3,704 performance
shares (as described in footnote 2 above) with an aggregate market value
at that date of $49,541. The amount shown as All Other Compensation for
1995 consists of Company contributions to defined contribution plans of
$10,150 ($1,966 in cash and an allocation of 611.87 shares of Common
Stock valued at $8,184 using the December 31, 1995 closing price) and
term life insurance premiums of $1,082.
(9) Mr. Lemmer became an executive officer June 1, 1994. At December 31,
1995, he held an aggregate of 1,415 performance shares (as described in
footnote 2 above) with an aggregate market value at that date of $18,926.
The amount shown as All Other Compensation for 1995 consists of Company
contributions to defined contribution plans of $9,556 ($1,278 in cash and
an allocation of 618.92 shares of Common Stock valued at $8,278 using the
December 31, 1995 closing price) and term life insurance premiums of
$1,014.
(10) Ms. Heartwell became an executive officer December 7, 1995. At December
31, 1995, she held an aggregate of 1,415 performance shares (as described
in footnote 2 above) with an aggregate market value at that date of
$18,926. The amount shown as All Other Compensation for 1995 consists of
Company contributions to defined contribution plans of $7,850 which is an
allocation of 586.93 shares of Common Stock valued using the December 31,
1995 closing price and term life insurance premiums of $820.
13
<PAGE>
The following table sets forth certain information with respect to options
to purchase Common Stock and SARs granted during the year ended December 31,
1995 to each of the named executive officers.
OPTION/SAR GRANTS IN 1995 (1)
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------
Number of
Securities Percent of Potential Realizable Value at
Underlying Total Assumed Annual Rates of Stock
Options/SARs Options Price Appreciation for Option
Granted Granted to Exercise or Term (3)
Name (number of Employees Base Price Expiration ------------------------------
shares) (2) in 1995 Per Share Date (2) 5 Percent (4) 10 Percent (5)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
One Share (6) 1 -- $11.81 -- $ 7.43 $ 18.83
Robert L. Keiser 78,000 19.1 $11.81 12/31/2004 $ 579,540 $ 1,468,740
Jerry W. Box 42,000 10.3 $11.81 12/31/2004 $ 312,060 $ 790,860
Edward W. Moneypenny 42,000 10.3 $11.81 12/31/2004 $ 312,060 $ 790,860
William P. Stokes, Jr. 20,000 4.9 $11.81 11/30/1998 $ 36,200 $ 75,800
William C. Lemmer 11,000 2.7 $11.81 12/31/2004 $ 81,730 $ 207,130
Frances G. Heartwell 8,000 2.0 $11.81 12/31/2004 $ 59,440 $ 150,640
</TABLE>
(1) No SAR grants were made in 1995.
(2) Options represent the right to purchase shares of Common Stock at a fixed
price per share and were granted with limited rights. The options vest at
the rate of 25 percent per year commencing on the first anniversary of the
grant date, except in the case of retirement or permanent disability in
which case the options fully vest and are exercisable for a period of up
to 36 months after such retirement or disability.
(3) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. Actual gains realized, if any, on stock
option exercises and Common Stock holdings are dependent on the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the values shown in this table will be achieved.
(4) Represents an assumed market price per share of Common Stock of $19.24
calculated by multiplying the exercise price of $11.81 by the growth
assumption of 5 percent (except for Mr. Stokes whose stock price
appreciation was adjusted to reflect a reduced option term of 36 months
from date of retirement).
(5) Represents an assumed market price per share of Common Stock of $30.64
calculated by multiplying the exercise price of $11.81 by the growth
assumption of 10 percent (except for Mr. Stokes whose stock price
appreciation was adjusted to reflect a reduced option term of 36 months
from date of retirement).
(6) The amounts shown are representative of what the "Potential Realizable
Value at Assumed Annual Rates of Stock Price Appreciation for Option Term"
would be for one share of Common Stock.
14
<PAGE>
The following table shows information with respect to the exercise of
options to purchase Common Stock and SARs during the year ended December 31,
1995, and the unexercised options held at December 31, 1995 and the value
thereof, by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1995
AND 12/31/95 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at 12/31/95 Options/SARs at
Shares Acquired (shares) (1) 12/31/95 (1)
on Exercise ----------------------------- -------------------------
(number of Value
Name shares) Realized Exercisable Unexercisable (2) Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Keiser........ 0 $ 0 80,775 175,505 $ 0 $121,875
Jerry W. Box............ 0 $ 0 85,522 94,460 $ 0 $ 65,625
Edward W. Moneypenny.... 0 $ 0 78,789 91,460 $ 0 $ 65,625
William P. Stokes, Jr... 0 $ 0 75,408 7,620 $ 0 $ 31,250
William C. Lemmer....... 0 $ 0 11,465 20,135 $ 0 $ 17,188
Frances G. Heartwell.... 0 $ 0 10,035 17,285 $ 0 $ 12,500
</TABLE>
(1) Options represent the right to purchase shares of Common Stock at a fixed
price per share. Certain of the options reported are contingent options
which are exercisable (subject to the option vesting schedule) only if the
related performance shares are canceled. On January 4, 1996, certain
performance shares awarded in 1993 terminated in accordance with their
terms as a result of non-attainment of the minimum targeted share price
established at the time of grant, and the related contingent options
became exercisable. See footnote 2 to the Summary Compensation Table
included elsewhere herein for additional information on the contingent
options and performance shares.
(2) Includes the following number of contingent options held by such persons,
with the number of options that became exercisable on January 4, 1996
shown in parentheses: R.L. Keiser -- 23,100 (17,325); J.W. Box --11,240 (
8,430); E.W. Moneypenny -- 11,240 (8,430); W.P. Stokes -- 7,620 (7,620);
W. C. Lemmer --2,230 (1,672); and F. G. Heartwell -- 2,230 (1,672).
DEFINED BENEFIT PLANS
The defined benefit plans of the Company that cover the named executive
officers provide the benefits shown below. The estimates assume that benefits
are received in the form of a single life annuity with 50 percent continuing
after the death of the employee for the life of his or her spouse. The
following table sets forth the benefit amounts at December 31, 1995.
<TABLE>
<CAPTION>
Estimated Annual Benefits Upon Retirement at Age 65
After Completion of the Following Years of Service
------------------------------------------------------
Final Average Compensation 35 Years
(1) 15 Years 20 Years 25 Years 30 Years or More
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 100,000.............. $ 37,500 $ 45,000 $ 52,500 $ 60,000 $ 65,000
$ 200,000.............. $ 75,000 $ 90,000 $ 105,000 $ 120,000 $ 130,000
$ 300,000.............. $ 112,500 $ 135,000 $ 157,500 $ 180,000 $ 195,000
$ 400,000.............. $ 150,000 $ 180,000 $ 210,000 $ 240,000 $ 260,000
$ 550,000.............. $ 206,250 $ 247,500 $ 288,750 $ 330,000 $ 357,500
$ 700,000.............. $ 262,500 $ 315,000 $ 367,500 $ 420,000 $ 455,000
$ 800,000.............. $ 300,000 $ 360,000 $ 420,000 $ 480,000 $ 520,000
$1,000,000.............. $ 375,000 $ 450,000 $ 525,000 $ 600,000 $ 650,000
</TABLE>
(1) Benefit amounts under the Company's Executive Retirement Plan are based
exclusively on base salary and guideline bonus amounts. Final Average
Compensation is the average of the base salary plus guideline bonus
amounts in the highest three consecutive years during the last 10 years of
service. The amounts reported in the Summary Compensation Table under
Salary and Bonus reflect total cash compensation for the years indicated.
The 1995 considered compensation for the following named executive
officers is: R.L. Keiser -- $759,992; J.W. Box -- $408,486; E.W.
Moneypenny -- $393,396; W.P. Stokes -- $249,434; W.C. Lemmer -- $236,995;
and F. G. Heartwell -- $166,720.
15
<PAGE>
Retirement benefits shown above are amounts calculated before any Social
Security offset. The Social Security offset is equal to 1 percent of primary
Social Security benefits for each year of participation in the Company's
Retirement Plan up to 30 years, or a maximum offset of 30 percent of primary
Social Security benefits.
Credited years of service for the named executive officers are as follows:
R.L. Keiser -- 30; J.W. Box -- 27; E.W. Moneypenny -- 19; W. P. Stokes -- 31;
W. C. Lemmer -- 17; and F. G. Heartwell -- 22.
SEVERANCE PLANS AND ARRANGEMENTS
The Special Executive Severance Plan provides severance benefits to the
named executive officers, other than Mr. Stokes who retired during 1995, in
the event of their "termination of employment" within two years of a
"corporate change" (as such terms are defined in the Special Executive
Severance Plan). A "corporate change" is defined to include for example, a
merger, sale of all or substantially all of the assets or a change in control
of the Company. The Compensation Committee has the authority to designate, or
delegate to the Company's Chief Executive Officer the authority to designate,
other officers to participate in the Special Executive Severance Plan.
Benefits under the Special Executive Severance Plan are set forth in
individual Executive Severance Agreements, the form of which is the same for
each participant.
All Executive Severance Agreements have a term of two years, with automatic
extensions for successive two-year periods unless terminated by the Company.
Severance benefits include payment of an amount up to three times the
participant's final annual compensation upon a termination of employment
following a "corporate change" of the Company. The terms of the Special
Executive Severance Plan also provide that if any payments made to the
executive officer, whether or not made under the Special Executive Severance
Plan, would cause the executive officer to be subject to an excise tax because
the payment is a "parachute payment" (as defined in the Internal Revenue Code)
then the Company will pay the executive officer an Excise Tax Premium (as
defined in the Special Executive Severance Plan) in a sufficient amount to
make the executive officer whole with respect to any additional tax that would
not have been payable except due to a payment on a corporate change.
As of December 31, 1995, payments under the Special Executive Severance Plan
to the individuals named above would have been as follows: R.L. Keiser --
$2,279,976; J.W. Box -- $1,228,757; E.W. Moneypenny -- $1,192,388; W. C.
Lemmer -- $712,901; and F. G. Heartwell -- $643,849 (without regard to the
Excise Tax Premiums).
These individuals would also be entitled to supplemental benefits such as
the continuation of insurance, the cost of which would not be significant in
relation to the aggregate payments. In addition, these individuals would be
entitled to the payment of counsel fees reasonably necessary to enforce the
Executive Severance Agreement, the value of which cannot be estimated at this
time.
In addition to the Special Executive Severance Plan, which is operational
only in the event of a "corporate change", the Company has an employee
severance plan applicable to specified terminations. Severance pay under this
plan could exceed $100,000 where applicable to certain long-service, higher-
paid employees.
16
<PAGE>
PERFORMANCE GRAPHS
The following graphs set forth the cumulative total stockholder returns for
Common Stock, the S&P 500 Index and a Company-selected peer group index for
the years indicated as prescribed by the SEC's rules. The first graph shows
total returns for the Company's peer group selected in 1995. The second graph,
which includes the peer group index selected in 1994, is presented to comply
with requirements of the SEC. The companies included in each peer group index
are publicly traded exploration and production companies having large oil and
gas reserves. The Company revised its peer group index in 1995 to exclude
Maxus Energy Corporation because it was acquired by YPF Sociedad Anonima in
1995. The other changes to the index were made in order to select companies
that the Company currently considers more compatible as a peer group.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG ORYX ENERGY COMPANY, S&P 500 INDEX AND PEER GROUP INDEX SELECTED IN 1995
(2)
[GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------
S&P 500 $100 $130 $140 $155 $157 $215
1995 Peer Group (3) $100 $ 90 $106 $128 $114 $137
Oryx Energy Company $100 $ 74 $ 58 $ 52 $ 36 $ 41
--------------------------------------------------------------------
</TABLE>
(1) Assumes $100 invested on January 1, 1991 at December 31, 1990 closing
price in Common Stock, the S&P 500 Index and a Company-selected peer group
index. Total return assumes reinvestment of dividends.
(2) Fiscal year ending December 31.
(3) In accordance with the SEC's rules, the Company elected to select peer
group companies on an industry basis for comparison purposes. The peer
group in 1995 is composed of 13 industry participants: Anadarko Petroleum
Corporation, Apache Corporation, Burlington Resources Inc., Enron Oil &
Gas Company, Louisiana Land and Exploration Company, Noble Affiliates,
Inc., Oryx Energy Company, Parker & Parsley Petroleum Company, Santa Fe
Energy Resources, Inc., Seagull Energy Corporation, Union Pacific
Resources Group Inc., Union Texas Petroleum Holdings, Inc. and Vastar
Resources, Inc. On June 30, 1992, Burlington Resources Inc. spun-off its
ownership of El Paso Natural Gas Company to its stockholders and, due to
this transaction, Burlington Resources Inc. has been included only for the
period of time subsequent to the date of this transaction. In addition,
Santa Fe Energy Resources, Inc., Union Pacific Resources Group Inc. and
Vastar Resources, Inc. have been included only for the period of time
during which their stock has been publicly traded. Total return
calculations were weighted according to the respective company's market
capitalization at the beginning of each period for which a return was
calculated. The initial period returns of Burlington Resources Inc., Santa
Fe Energy Resources, Inc., Union Pacific Resources Group Inc. and Vastar
Resources, Inc. were weighted using market capitalizations calculated with
the first available quarter-end data closest to their inclusion in the
peer group.
17
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COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG ORYX ENERGY COMPANY, S&P 500 INDEX AND PEER GROUP INDEX SELECTED IN 1994
(2)
[GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------
S&P 500 $100 $130 $140 $155 $157 $215
1994 Peer Group (3) $100 $ 82 $ 86 $ 95 $ 87 $102
Oryx Energy Company $100 $ 74 $ 58 $ 52 $ 36 $ 41
--------------------------------------------------------------------
</TABLE>
(1) Assumes $100 invested on January 1, 1991 at December 31, 1990 closing
price in Common Stock, the S&P 500 Index and a Company-selected peer group
index. Total return assumes reinvestment of dividends.
(2) Fiscal year ending December 31.
(3) In accordance with the SEC's rules, the Company elected to select peer
group companies on an industry basis for comparison purposes. The peer
group in 1994 was composed of 12 industry participants: Anadarko Petroleum
Corporation, Apache Corporation, Burlington Resources Inc., Enron Oil &
Gas Company, Enterprise Oil plc, LASMO plc, Louisiana Land and Exploration
Company, Maxus Energy Corporation, Mesa Inc., Oryx Energy Company, Santa
Fe Energy Resources, Inc. and Union Texas Petroleum Holdings, Inc. On June
30, 1992, Burlington Resources Inc. spun-off its ownership of El Paso
Natural Gas Company to its stockholders and, due to this transaction,
Burlington Resources Inc. has been included only for the period of time
subsequent to the date of this transaction. In addition, Mesa, Inc. and
Santa Fe Energy Resources, Inc., have been included only for the period of
time during which their stock has been publicly traded. Total return
calculations were weighted according to the respective company's market
capitalization at the beginning of each period for which a return was
calculated. The initial period returns of Burlington Resources Inc., Mesa
Inc. and Santa Fe Energy Resources, Inc. were weighted using market
capitalizations calculated with the first available quarter-end data
closest to their inclusion in the peer group.
18
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APPROVAL OF INDEPENDENT ACCOUNTANTS
------------------------------
ITEM NUMBER 2 ON PROXY CARD
Coopers & Lybrand L.L.P. has served for many years as independent
accountants for the Company and for Sun Energy Partners, L.P. The Audit
Committee has recommended and the Board has approved the appointment of
Coopers & Lybrand L.L.P. as independent accountants for the Company for fiscal
year 1996, subject to the approval of stockholders.
At the Meeting, a vote will be taken on a proposal to approve such
appointment. While there is no legal requirement that this proposal be
submitted to stockholders, the Board believes that the selection of
independent accountants to audit the financial statements of the Company is of
sufficient importance to seek stockholder approval. In the event a majority of
the shares of Common Stock present in person or represented by proxy and
entitled to vote at the Meeting on this proposal is not voted in favor of the
approval of Coopers & Lybrand L.L.P., the Board will reconsider its
appointment of independent accountants of the Company.
It is expected that representatives of Coopers & Lybrand L.L.P. will be
present at the Meeting with the opportunity to make a statement if they desire
to do so and that they will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS APPOINTMENT.
APPROVAL OF EQUITY AND DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
-----------------------------------------------------
ITEM NUMBER 3 ON PROXY CARD
INTRODUCTION
On March 7, 1996, the Board adopted, subject to the approval of the
stockholders of the Company, the Oryx Energy Company Equity and Deferred
Compensation Plan for Non-Employee Directors (the "Directors' Equity Plan").
Currently, as discussed above under "Information Concerning the Board of
Directors -- Directors' Compensation", the directors of the Company who are
not also employees of the Company receive cash compensation in the form of an
annual retainer and committee and meeting fees. The Company believes that it
is important that the interests of such directors be aligned with the
interests of the stockholders of the Company. The Company also believes that
one mechanism to ensure this result is to compensate such directors with
shares of Common Stock.
As described below, the Directors' Equity Plan requires each non-employee
director of the Company to receive 50 percent of his annual retainer in shares
of Common Stock and permits non-employee directors to elect to receive up to
100 percent of the balance of such retainer and all committee and meeting fees
in shares of Common Stock. In addition, the Directors' Equity Plan provides
for certain automatic grants of shares of Common Stock to non-employee
directors. The Directors' Equity Plan also permits non-employee directors to
defer their cash compensation in the same manner as is currently provided
under the Directors' Deferred Compensation Plan.
SUMMARY OF THE DIRECTORS' EQUITY PLAN
A copy of the Directors' Equity Plan is attached to this Proxy Statement as
Exhibit A. The following summary of the Directors' Equity Plan is qualified in
its entirety by reference thereto.
Purposes. The purposes of the equity compensation features of the Directors'
Equity Plan are to encourage non-employee directors to acquire shares of
Common Stock and thereby to align their interests more closely with the
interests of the other stockholders of the Company and to encourage the
highest level of director performance by providing the non-employee directors
with a more direct interest in the Company's attainment of its financial
goals. The purpose of the elective deferral features of the Directors' Equity
Plan is to permit non-employee directors to defer to the date of termination
of their service as directors of the Company or other fixed date all or part
of their regular cash compensation.
Eligibility. All directors of the Company who are not also officers or
employees of the Company or its subsidiaries ("non-employee directors") will
participate in the Directors' Equity Plan. Currently, there are six non-
employee directors.
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Automatic Grants of Common Stock. The Directors' Equity Plan provides for
the following automatic grants of shares of Common Stock to non-employee
directors: (a) a one-time grant of 5,500 shares of Common Stock to each non-
employee director effective as of the next business day after the Meeting; (b)
a one-time grant of 5,000 shares of Common Stock to each non-employee director
who is newly elected to the Board after the date of the Meeting; and (c) an
annual grant of 500 shares of Common Stock effective as of the date of each
annual meeting of stockholders of the Company, beginning with the year 1997,
to each person who is a non-employee director on the date of and immediately
following such meeting and has served in that capacity for at least six months
immediately preceding the date of such meeting.
Each such grant shall be made either (i) all in shares of Common Stock that
will vest over a specified period of time ("Restricted Shares") or (ii) all in
shares of Common Stock that will be immediately vested but will be subject to
restrictions on transfer for a period of six months after the date of issuance
("Transfer Restricted Shares"), as shall be designated by the recipient of the
grant by notice in writing delivered to the Company prior to a specified date
in advance of the effective date of issuance of the shares. If no such
designation is made, the grant shall be made all in Transfer Restricted
Shares.
Common Stock Applicable to Retainer and Other Fees. The amount of the annual
retainer payable to each non-employee director is determined annually by the
Board. Under the Directors' Equity Plan, 50 percent of the director's retainer
represents the cash component of the retainer and the other 50 percent of his
retainer represents the equity component or the "Required Share Amount". The
Required Share Amount will automatically be paid to the director in shares of
Common Stock. In addition, each non-employee director may elect to have up to
100 percent of the cash component of his retainer and any other cash earned by
him for his services as a director (collectively, the "Voluntary Share
Amount") applied to the purchase of additional shares of Common Stock.
The Directors' Equity Plan provides that promptly after the end of each
"Plan Year", the Company will issue shares of Common Stock to each non-
employee director representing his Required Share Amount and Voluntary Share
Amount, if any, for such Plan Year. Under the Directors' Equity Plan, a "Plan
Year" is defined as a 12-month period commencing on May 1 and ending on the
following April 30, except that the first Plan Year will commence on July 1,
1996 and end on April 30, 1997. The number of shares of Common Stock issuable
to each non-employee director for a Plan Year will be equal to his Required
Share Amount and Voluntary Share Amount, if any, for such Plan Year divided by
the average of the fair market value of the Common Stock as of the end of each
calendar quarter within the Plan Year (or within that portion of the Plan Year
during which the director served as a director of the Company) ("Average Share
Price"). A non-employee director must be serving in that capacity at the end
of the Plan Year to be eligible to receive shares of Common Stock for such
year. A non-employee director whose service as a director of the Company
terminates prior to the end of the Plan Year will be paid any earned amounts
of his Voluntary Share Amount for such year in cash, without interest, as
promptly as practicable following such termination of service.
Each award of shares of Common Stock made to a non-employee director with
respect to his Required Share Amount for a Plan Year shall be made either (i)
all in Restricted Shares or (ii) all in Transfer Restricted Shares, and each
award of shares of Common Stock made to a non-employee director with respect
to his Voluntary Share Amount, if any, for a Plan Year shall be made either
(i) all in Restricted Shares or (ii) all in unrestricted shares of Common
Stock ("Unrestricted Shares"), in each case as shall be designated by the
director by notice in writing delivered to the Company prior to the first day
of such Plan Year; provided that a newly elected non-employee director may
make such designation prior to the commencement of his initial term of office
with respect to his Required Share Amount and Voluntary Share Amount earned in
the balance of the Plan Year of his initial election to the Board. If no such
designation is made, the award shall be made all in Transfer Restricted Shares
(in the case of an award with respect to a Required Share Amount) or
Unrestricted Shares (in the case of an award with respect to a Voluntary Share
Amount).
If the Directors' Equity Plan had been in effect during the entire 1995
calendar year (and assuming a Plan Year commencing on January 1 and ending on
the next following December 31), the number of shares of Common Stock that
would have been issued to the non-employee directors as a group with respect
to their Required Share Amounts for that year is 5,499. The Company has no way
to determine the number of shares of Common Stock that would have been issued
to the non-employee directors with respect to their Voluntary Share Amounts
for such year; however, the maximum number of shares of Common Stock that
would have been issued to the non-employee directors as a group with respect
to their Voluntary Share Amounts for such
20
<PAGE>
year (assuming all non-employee directors elected to take 100 percent of the
cash earned by them as directors in shares of Common Stock) is 15,822.
Restrictions on Restricted Shares. All Restricted Shares issued to a non-
employee director under the Directors' Equity Plan will be subject to a
restricted period, which will commence on the effective date of issuance of
such Restricted Shares and end on April 30 of the calendar year in which the
director's then current term of office as a director of the Company is
scheduled to expire (the "initial restricted period"). Each non-employee
director will have the right to extend the initial restricted period and any
extended restricted period applicable to Restricted Shares (collectively, the
"restricted period") so that such restricted period ends on April 30 of the
calendar year in which the director's next succeeding term of office would be
scheduled to expire, provided that such director notifies the Company in
writing of such extension on or prior to April 30 of the calendar year
immediately preceding the calendar year of expiration of the then current
restricted period. Under certain circumstances, (i) the initial restricted
period applicable to certain Restricted Shares would end on April 30 of the
calendar year in which the director's next succeeding term of office would be
scheduled to expire and (ii) a director would have the right to determine
whether the initial restricted period applicable to certain Restricted Shares
would end on April 30 of the calendar year in which his then current term of
office is scheduled to expire or on April 30 of the calendar year in which his
next succeeding term of office is scheduled to expire.
Restricted Shares issued to a non-employee director shall be forfeited to
the Company at no cost to the Company if the director's service as a director
of the Company terminates prior to the expiration or termination of the
restricted period applicable to such shares; provided that the Restricted
Shares shall become fully vested and the restricted period shall terminate
upon (i) the director's termination of service as a director of the Company
during the restricted period due to death, disability (as defined in the
Directors' Equity Plan), or a permitted event (as defined in the Directors'
Equity Plan) or (ii) the occurrence of a corporate change (as defined in the
Directors' Equity Plan) during the restricted period. Under the Directors'
Equity Plan, a "permitted event" will be deemed to have occurred if: (i) the
director shall have resigned as a director of the Company because he is unable
to continue his duties as a director as a result of an injury or illness
affecting a member of his immediate family and such inability is likely to
exist for a period of six months or more; (ii) the director shall have retired
as a director of the Company because he has reached the mandatory retirement
age for directors as established by Company policy; (iii) the director, after
being nominated by the Board, shall not be reelected by the stockholders of
the Company in an election of directors; or (iv) the director's directorship
shall have ceased at the end of his term because such director was not
nominated for reelection as a director of the Company in connection with an
election of directors. Under the Directors' Equity Plan, "corporate change"
means (i) the dissolution or liquidation of the Company; (ii) certain
reorganizations, mergers, or consolidations of the Company; (iii) the sale of
all or substantially all the assets of the Company; and (iv) a change in
control of the Company (as defined in the Directors' Equity Plan).
Until the Restricted Shares are delivered to a director upon vesting, the
Restricted Shares cannot be sold, assigned, transferred, or otherwise
encumbered or disposed of by the director in any manner. The Company will
retain custody of the stock certificates representing the Restricted Shares
during the restricted period. A director will have all the rights of a
stockholder, including voting and dividend rights, with respect to his
Restricted Shares, subject to the forfeiture and other restrictions of the
Directors' Equity Plan.
Termination of Deferred Compensation Plan. Under the Directors' Equity Plan,
non-employee directors will be permitted to defer the receipt of all or a
portion of their cash compensation from the Company in the same manner as is
currently provided under the Directors' Deferred Compensation Plan (the
"Deferred Compensation Plan"). The Directors' Equity Plan provides that,
effective as of July 1, 1996, the Deferred Compensation Plan shall terminate,
and all cash units and share units credited as of such date to a non-employee
director's deferred compensation account under the Deferred Compensation Plan
shall automatically be transferred and credited to a deferred compensation
account established for such director under the Directors' Equity Plan.
Thereafter, except as described in the following paragraph, such cash units
("Subject Cash Units") shall be governed by the provisions of the Directors'
Equity Plan to the same extent as if they had originally been credited as cash
units thereunder.
The Directors' Equity Plan provides that each non-employee director with
Subject Cash Units may elect to have up to 100 percent of the Subject Cash
Units credited to his account as of July 1, 1996 applied to the purchase of
Restricted Shares effective as of July 1, 1996. A director must notify the
Company in writing of
21
<PAGE>
such election on or prior to July 1, 1996. The number of Restricted Shares to
be issued to a director making such an election will be equal to the amount of
his Subject Cash Units that he elected to have applied to the purchase of
Restricted Shares divided by the fair market value of the Common Stock on July
1, 1996. A non-employee director must be serving in that capacity on July 1,
1996 in order to be eligible to receive such shares. Any Subject Cash Units
not converted into Restricted Shares will remain subject to the provisions of
the Directors' Equity Plan. If each non-employee director with Subject Cash
Units converted 100 percent of such units into Restricted Shares as provided
above, he would receive the following number of Restricted Shares (based on
the cash units credited to his account under the Deferred Compensation Plan as
of December 31, 1995 and using the price of $13.375, the closing sales price
of the Common Stock on the New York Stock Exchange on December 29, 1995): Paul
R. Seegers -- 6,907 shares; David S. Hollingsworth -- 7,169 shares; William E.
Bradford -- 6,714 shares; and Ian L. White-Thomson -- 1,715 shares.
A non-employee director with share units credited to his deferred
compensation account under the Deferred Compensation Plan shall continue to
hold such units subject to the terms and conditions that were in effect with
respect thereto under the Deferred Compensation Plan immediately prior to its
termination. The Board may, in its discretion, grant to such non-employee
director the right to convert such share units into shares of Common Stock
under the Directors' Equity Plan on such terms and conditions as the Board may
prescribe. Paul R. Seegers is the only director with share units credited
under the Deferred Compensation Plan.
Termination of Retirement Plan. The Directors' Equity Plan provides that,
effective as of July 1, 1996, the Non-Employee Directors' Retirement Plan (the
"Retirement Plan") shall be "frozen" such that (i) no directors of the Company
newly elected to the Board after such date shall be entitled to participate in
the Retirement Plan, (ii) the retirement benefit under the Retirement Plan for
all non-employee directors serving as of such date shall be fixed from and
after such date as that amount which the director would have been entitled to
receive under the Retirement Plan had he retired as a director effective as of
such date (disregarding for this purpose the Retirement Plan's years of
service eligibility requirement), and (iii) no future benefits under the
Retirement Plan shall accrue from and after July 1, 1996. As a result, the
Non-Employee Directors' Retirement Plan will be effectively terminated on July
1, 1996. Under the Directors' Equity Plan, the Board may, in its discretion,
provide for the discharge of the Company's obligations with respect to such
frozen retirement benefits on such terms and conditions as the Board may
prescribe, which may include the grant to non-employee directors of the right
to exchange such frozen retirement benefits for shares of Common Stock (which
may be Transfer Restricted Shares, Restricted Shares or Unrestricted Shares).
The number of share of Common Stock issuable in any such exchange may be based
on the average closing prices of the Common Stock on the last trading days
immediately preceding April 1 and July 1, 1996 as reported by the New York
Stock Exchange, the closing price at the date of the exchange or such other
price as the Board may consider appropriate.
Stock Subject to the Directors' Equity Plan. A total of 300,000 shares of
Common Stock are available to be issued under the Directors' Equity Plan. Such
shares may be shares of original issuance or treasury shares or a combination
of the foregoing, as the Board, in its discretion, shall determine. Any
Restricted Shares that are forfeited to the Company shall again be available
for use under the Directors' Equity Plan. The number and kind of shares
issuable under the Directors' Equity Plan may be adjusted to reflect stock
dividends, stock splits, recapitalizations, reorganizations, or similar
changes.
Amendment. The Board may at any time suspend, terminate, amend, or modify
the Directors' Equity Plan; provided that no amendment or modification of the
Directors' Equity Plan shall become effective without the approval of such
amendment or modification by the stockholders of the Company if the Company,
on the advice of counsel, determines that stockholder approval is necessary or
desirable. The provisions of the Directors' Equity Plan governing the share
awards described under "Automatic Grants of Common Stock" above and the share
awards made in respect of Required Share Amounts cannot be amended more than
once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, the Employee Retirement Income Security Act of 1974, or
the rules promulgated thereunder.
RECOMMENDATION
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE
DIRECTORS' EQUITY PLAN.
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APPROVAL OF EXECUTIVE VARIABLE INCENTIVE PLAN
-------------------
ITEM NUMBER 4 ON PROXY CARD
INTRODUCTION
As of January 1, 1996, the Board adopted, subject to the approval of the
stockholders of the Company, the Oryx Energy Company Executive Variable
Incentive Plan (the "Executive VIP"). The Executive VIP will replace the
Company's Variable Incentive Plan applicable to other employees of the Company
with respect to those executive employees designated to participate in the new
Executive VIP. As described more fully below, the new Executive VIP is similar
to the Variable Incentive Plan for other employees of the Company with certain
exceptions, most notably the addition of an election to receive all or a
portion of the bonus award under the Executive VIP in the form of restricted
stock of the Company ("Restricted Stock") rather than cash.
SUMMARY OF THE EXECUTIVE VIP
A copy of the Executive VIP is attached to this Proxy Statement as Exhibit
B. The following summary of the Executive VIP is qualified in its entirety by
reference thereto.
Purpose. The purpose of the Executive VIP is to provide incentive
compensation opportunities for certain executive employees of the Company and
to reinforce three significant Company values, consisting of teamwork, sharing
success, and the rewarding of individual performance. It also is designed to
assist in the attraction, motivation and retention of superior employees and
to link employees to the Company's strategic objectives and interests of
stockholders. The Executive VIP also contains an elective deferral feature the
purpose of which is to permit certain executive employees who participate in
the Executive VIP to defer to a later date the receipt of all or part of their
cash award under the Executive VIP.
Plan Year. The Executive VIP is maintained on the basis of a "plan year",
which is the calendar year.
Eligibility. Only those employees of the Company or a subsidiary thereof who
are "officers" of the Company, as defined in Rule 16a-1(f) promulgated by the
Securities and Exchange Commission under Section 16 of the Securities Exchange
Act of 1934, as amended, who are designated by the Compensation Committee, in
its sole discretion, as of the beginning of a plan year are eligible to
participate in the Executive VIP for such plan year. Currently there are eight
employees of the Company and its subsidiaries who potentially are eligible for
participation in the Executive VIP.
Once designated by the Compensation Committee, an executive employee must be
on the regular payroll of the Company or any of its subsidiaries as of
December 31 of the plan year and have at least 26 completed weeks of active
service during the plan year in order to be eligible to receive an award under
the Executive VIP for such year. Any employee with fewer than 52 completed
weeks of active service during the plan year will have his or her award pro
rated. There are exceptions from the above requirements for circumstances
involving family and medical leave, disability leave, retirement or death.
Executive VIP Administration. The Compensation Committee has the right and
authority to prescribe rules and regulations with respect to the
administration of the Executive VIP, to construe the Executive VIP, to make
determinations necessary or advisable for administering the Executive VIP and
generally to exercise all powers conferred on the Compensation Committee under
the Executive VIP. The Compensation Committee also has the authority to amend,
modify, suspend or terminate the Executive VIP at any time provided that,
generally, no such amendment, modification, suspension or termination may
adversely affect the right of any participant to receive any amount to which
the participant has already become entitled.
Calculation of Award. The awards granted pursuant to the Executive VIP are
determined according to a formula based on several factors, which include
threshold and target performance goals, individual target award levels and the
employee's base salary. For this purpose, base salary is defined as the
annualized weekly base salary in effect as of the last pay period ending
during the plan year. At the beginning of each plan year the Compensation
Committee establishes the performance goals and the respective threshold and
target levels of performance associated with each. The performance goals
established by the Compensation Committee for a plan year may consider one or
more of the following factors: stock price, cash flows, net income, operating
income, expense levels, debt balance, debt ratings, total shareholder return,
return on investment, return on equity, economic value added, production
volumes, reserve additions, profit or cost per equivalent barrel, earnings per
23
<PAGE>
share, net asset value per share, or such other goals as the Compensation
Committee may determine appropriate for a plan year. The performance goals may
be based on the performance of the Company generally, in the absolute or in
relation to the performance of its peers, or the performance of a particular
employee, division, department, branch, subsidiary or other unit to which a
particular employee is assigned. Different performance goals may be
established for different participants or groups of participants. Each
performance goal will be weighted to reflect its relative performance to the
Company's strategic business plans for the year. The sum of the weightings of
the target performance goals for a participant or a group of participants for
the year will equal 100 percent.
The Compensation Committee will establish at the beginning of the plan year
individual target award levels expressed as a percentage of a participant's
base salary for the year.
As of the end of each plan year, the Compensation Committee will calculate
each participant's incentive compensation award by multiplying the
participant's base salary by the participant's individual target award level
for the plan year. The result will then be multiplied by the performance score
applicable to the participant. The performance score will be determined by the
Compensation Committee based upon actual performance compared to the threshold
and target performance goal levels. The Compensation Committee will certify
the degree of achievement of each performance goal based upon the actual
performance results for the year. Once the above calculations are completed,
the Compensation Committee will have the discretion to reduce (but not
increase) any participant's award for the year based upon such factors as the
Committee may determine to be relevant, including individual performance. In
no event will the maximum incentive compensation award payable to a
participant based upon the above calculation exceed 200 percent of a
participant's annualized weekly base salary in effect as of the first pay
period ending during the plan year to which the award relates.
In addition to the incentive compensation awards based upon attainment of
performance goals as set forth above, the Compensation Committee may, in its
sole discretion, grant ad hoc incentive compensation awards to any participant
or group of participants in such amount or amounts as it shall determine to be
appropriate based upon such factors as it shall deem to be relevant whether or
not targeted goals are achieved. Any such ad hoc incentive compensation awards
shall be determined and granted by the Compensation Committee after the plan
year to which the award relates but prior to April 30 following the end of
such plan year.
Payment of Awards. Incentive compensation awards under the Executive VIP may
be paid in cash or shares of Common Stock or any combination thereof as
determined by the Compensation Committee. Awards normally will be paid by
April 30 following the completion of the plan year. Participants eligible to
participate in the Company's Executive Deferred Compensation Plan may elect to
defer their cash incentive compensation awards payable pursuant to the
Executive VIP if such election is made prior to the beginning of a plan year.
Election to Receive Restricted Stock. Certain participants (as designated by
the Compensation Committee by February 15 of the plan year) also may elect to
have up to 100 percent of their cash incentive compensation award for a plan
year paid to them in shares of Restricted Stock. Such election must be made
before March 1 of the plan year with respect to which the award is being
earned. Once made, the election is irrevocable, although the Compensation
Committee retains the discretion to cause the Company to settle all or any
part of the Company's obligation under a participant's election to receive
Restricted Stock by the payment of the cash incentive compensation award in
lieu of the Restricted Stock. In order to receive Restricted Stock, the
participant must remain an employee of the Company or a subsidiary until the
date that the shares of Restricted Stock are issued.
The number of shares of Restricted Stock issuable to each participant for a
plan year will be determined by dividing (i) the product obtained by
multiplying the amount of the participant's cash incentive compensation award
for such year times the portion of such award that the participant elected to
have paid in Restricted Stock (the "Subject Amount"), by (ii) the fair market
value of the Common Stock on the first business day following the completion
of the plan year. In addition, the Compensation Committee may in its
discretion increase the value of a participant's Subject Amount by multiplying
it by a factor, which shall not be greater than 150 percent. The factor will
be established by the Compensation Committee by February 15 of the plan year
and shall be the rate which the Compensation Committee determines to be
appropriate to reflect the participant's election to forego cash compensation
in exchange for Restricted Stock.
Restrictions on Restricted Stock. All Restricted Stock issued to a
participant pursuant to the Executive VIP shall be subject to a restricted
period of such number of years as the Compensation Committee shall determine
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(such determination to be made prior to February 15 of the plan year). The
Executive VIP gives the Compensation Committee authority to grant to
participants to whom Restricted Stock has been issued the right to extend the
restricted period applicable to such stock for an additional period of time or
until the occurrence of a specified event. Restricted Stock issued to an
employee shall be forfeited to the Company at no cost to the Company if the
employee's service as an employee of the Company terminates prior to the
expiration or termination of the restricted period applicable to the shares;
provided that the Restricted Stock will become fully vested and the restricted
period shall terminate upon (i) the employee's termination of service as an
employee of the Company during the restricted period due to death, disability
(as defined in the Executive VIP) or retirement (as defined in the Executive
VIP), (ii) the involuntary termination of the employee's service as an
employee of the Company for reasons other than "Just Cause" as defined in the
Executive VIP, or (iii) the occurrence of a corporate change (as defined in
the Executive VIP) during the restricted period. Under the Executive VIP, a
"corporate change" means (i) the dissolution or liquidation of the Company;
(ii) certain reorganizations, mergers, or consolidations of the Company; (iii)
the sale of all or substantially all of the assets of the Company; and (iv) a
change in control of the Company (as defined in the Executive VIP). Until the
Restricted Stock is delivered to an employee upon vesting, the Restricted
Stock may not be sold, assigned, transferred, or otherwise encumbered or
disposed of by the employee in any manner. The Company will retain custody of
the stock certificates representing the Restricted Stock during the restricted
period. An employee will have all rights of a stockholder, including voting
and dividend rights, with respect to his or her Restricted Stock, subject to
the forfeiture and other restrictions of the Executive VIP. Under the
Executive VIP, the Compensation Committee has the right to cancel all or any
portion of any outstanding restrictions prior to the expiration or termination
of such restrictions with respect to any or all shares of Restricted Stock on
such terms and conditions as it may deem appropriate.
Stock Subject to Plan. A total of 300,000 shares of Common Stock are
available to be issued under the Executive VIP. In the event the Company
effects a split of the Common Stock or a dividend payable in Common Stock, or
in the event the outstanding Common Stock is combined into a smaller number of
shares, the maximum number of shares that may be issued or awarded under the
Executive VIP will be increased or decreased proportionately. Shares that have
been previously delivered to a participant as Restricted Stock that have since
been forfeited will be available for further issuance or award under the
Executive VIP. Shares of Common Stock issued pursuant to the Executive VIP may
be shares of original issuance or treasury shares or a combination of both, as
the Compensation Committee determines.
RECOMMENDATION
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE
EXECUTIVE VIP.
PROPOSALS OF STOCKHOLDERS
--------------------------------------------
PROPOSAL NO. 1 -- ITEM NUMBER 5 ON PROXY CARD
Mr. John Gregory Townsend, 1112 General Lafayette Boulevard, West Chester,
Pennsylvania 19382, who owns 109 shares of Common Stock has advised the
Company that he intends to offer the following proposal and supporting
statement for action at the Meeting:
"RESOLVED, that Oryx Energy Company be requested to establish a
Shareholders' Advisory Committee, to provide the Board of Directors
with recommendations on strategic policy matters and business strategy
issues that may enhance shareholder value. Such matters may include:
major acquisitions, divestitures, restructurings, mergers, or other
issues on which the Board would elect to consult the Committee. This
resolution will in no way limit or otherwise restrict the Board in its
ability to take any action it deems in the Company's best interest.
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"Membership of the Shareholders' Advisory Committee will consist of a
least ten members, who will serve without compensation except for the
reimbursement of reasonable expenses. The Board will develop procedures
for selection of members willing to serve, provided the following
criteria are met:
. Members will be the owner or beneficial owner of at least 1,000
shares of the Company's common voting stock for the entire period of
their membership.
. At least six members will be selected from the 200 largest beneficial
owners of the Company's voting shares.
. Members of the Committee will have no present affiliation with the
Company, other than as a shareholder.
The term of each member shall be for one year. In no case can a member
serve more than two consecutive terms."
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL NO. 1:
"Oryx Energy Company's mission, as stated in its recent annual
reports, is to create value for its shareholders. However, the Company
has been unable to achieve sustainable increases in shareholder value
in recent years. As shown in the Company's March 1995 proxy statement,
Oryx Energy Company's five-year cumulative total return on its common
stock showed a decline of 70% from 1989 to 1994, versus an increase of
52% in the S&P 500 stock index during the same period. In a broad,
external comparison of American companies published by Fortune in
November 1994, Oryx ranked in the lower quartile (775 out of 1000
companies), down from a rank of 489 in 1989, on the measure of market
Value Added. In summary, Oryx Energy Company's shareholder value has
not increased, while the Company's annual discretionary cash flow has
declined, despite reductions in capital spending, elimination of the
common stock dividend, and significant reductions in employees and
operating costs.
Therefore, it is recommended that a Shareholders' Advisory Committee
be formed to provide an organized structure to communicate shareholders
interests to the Board and to insure shareholder value is enhanced. The
committee will have no authority to act on behalf of the Company, and
it will not become involved in the Company's management. The Committee
will address policy topics and significant business strategy issues
that may have a major impact on shareholder value. The Committee will
strengthen the relationship between the Board and its shareholders, and
will benefit the Company by providing directors with a valuable
resource for understanding shareholder viewpoints. I recommend your
support FOR this proposal."
STATEMENT OF BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST STOCKHOLDER
PROPOSAL NO. 1
This proposal seeks the creation of a "committee" of stockholder
representatives which would, at best, be redundant and which could well
interfere with the ability of the Board to carry out its obligations to manage
the Company in the interests of all stockholders. The Board of Directors
elected by the stockholders is charged with the responsibility to manage the
Company and, in doing so, to seek all the information and advice its members
require, both from Company officers and from professionals and others outside
the Company. The proposed committee would serve only to add a cumbersome, time
consuming and costly layer of bureaucracy to the governance of the Company.
THE BOARD THEREFORE RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL.
PROPOSAL NO. 2 -- ITEM NUMBER 6 ON PROXY CARD
The California Public Employees' Retirement System ("CalPERS"), P. O. Box
942708, Sacramento, California 94229-2708, which owns 477,000 shares of Common
Stock, has advised the Company that it intends to offer the following proposal
and supporting statement for action at the Meeting.
"RESOLVED, that the stockholders of Oryx Energy Corporation [sic]
recommend that the board of directors take the necessary steps, in
compliance with applicable law, to reorganize itself into one class.
The reorganization shall be done in a manner that does not affect the
unexpired terms of directors previously elected."
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STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL NO. 2:
"Is accountability by the board of directors important to
shareholders? At the 1995 annual meeting, shareholders of this Company
answered: YES. By a sweeping majority, 56% of votes cast, shareholders
urged the board to reorganize itself into one class. This vote -- a
true shareholder mandate--was cast in favor of an identical proposal to
re-classify the board sponsored last year by the California Public
Employees' Retirement System (CalPERS).
To date, the board has failed to take the necessary steps to amend
the Company's Certificate of Incorporation, in order to implement that
proposal. Thus, the shareholder mandate of 1995 goes unheeded.
As a public pension trust, and the owner of approximately 477,000
shares of the Company's common stock, CalPERS demands accountability
from the board. This is why we are again sponsoring a proposal to
organize the board in a single class, so the directors would stand for
election each year.
By classifying itself, a board insulates its members from immediate
challenge. Insularity may have made sense in the past (e.g., during the
takeover frenzy of the 1980s). But now, it works primarily to hamper
accountability.
Staggered terms can prevent shareholders from mounting a successful
opposition to the entire board. By comparison, a de-staggered board
would stand for election in its entirety, each year.
As shareholders have already urged -- the time has come to eliminate
the current three classes of directors. As currently classified,
shareholders can only vote one-third of the board at any given time.
CalPERS believes that a company's corporate governance procedures and
practices, and the level of management accountability they impose, are
related to its financial performance. It is intuitive that, when
directors are accountable for their actions, they perform better.
Clearly, CalPERS and other shareholders are dissatisfied with the
board's accountability for long-term performance by the Company.
CalPERS is at a loss to understand why -- after last year's 56%
mandate -- the board has failed to take the necessary steps to de-
classify itself. The board should bring this matter to a vote, for the
purpose of amending the Company's certificate of incorporation. Such a
vote could, and should, have been noticed for action at this year's
annual meeting. Why has the board failed to do so, if not to escape
accountability at the ballot box?
Once again, CalPERS urges you to vote FOR this proposal, as a
powerful tool for management incentive and accountability."
STATEMENT OF BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST STOCKHOLDER
PROPOSAL NO. 2
The Board of Directors concluded not to submit to a stockholder vote an
amendment to declassify the Board because the Board continues to believe that
the present system of electing directors in three classes is in the best
interests of the Company's stockholders and should not be changed.
A classified board -- a common structure shared with a majority of both the
Fortune 500 companies and the more than fifteen hundred public companies
surveyed by the Investor Responsibility Research Center, Inc. --offers
important advantages to stockholders. It allows stockholders to change yearly
one-third of the directors and thereby substantially change the board's
composition and character. At the same time it facilitates continuity and
stability by assuring stockholders that a majority of their directors will
have prior experience as directors of the Company and be familiar with its
business and operations. Such continuity also helps the Company to attract and
retain qualified individuals willing to commit the time and dedication
necessary to understand the Company, its operations and competitive
environment. Additionally a classified board is designed to discourage
attempts to effect changes of control of a company with inadequate, if any,
consideration paid to shareholders, and to encourage any person seeking to
acquire control of a company to negotiate with its board of directors, which
is uniquely positioned under such circumstances to assure stockholders that
any transaction will be equitable and fair to them.
Approval of this stockholder proposal would not in and of itself eliminate
board classification and institute the annual election of directors. While the
proposal received a majority of the votes cast in 1995, the elimination of
board classification requires an amendment to the Company's Certificate of
Incorporation through the
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affirmative vote of 75 percent of the outstanding shares of Common Stock. Last
year only 42 percent of the outstanding shares of Common Stock were voted in
favor of the proposal.
The Board is committed to building stockholder value. The new direction of
the Company announced and implemented in 1995 supports this. The Board
believes the Company's current board structure does not in any way relieve the
Board members, individually or collectively, from being both responsible and
accountable for the Company's performance.
The Board, in the exercise of its fiduciary duty owed to stockholders, has
concluded that a classified board is in the stockholders' best interests for
the reasons stated.
THE BOARD THEREFORE RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL.
OTHER BUSINESS
------------------------------------------------------------
The Board does not know of any business to come before the Meeting other
than that set forth in the Notice of Annual Meeting of Stockholders. However,
if any other business shall properly come before the Meeting, it is the
intention of the proxy holders to vote upon such business in accordance with
their judgment.
SECTION 16(A) REPORTING DELINQUENCIES
--------------------------------
Section 16(a) of the Exchange Act requires directors and officers of the
Company, and persons who own more than ten percent of a registered class of
equity securities of the Company, to file with the SEC and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of the Company. Directors,
officers and more than ten percent beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on the information furnished to the
Company and written representations that no other reports were required,
during the year ended December 31, 1995, there was compliance with all
applicable Section 16(a) filing requirements.
STOCKHOLDER NOMINATIONS AND PROPOSALS FOR THE 1997 ANNUAL MEETING
--------------------------------------------------------------------
Subject to certain requirements contained in the Company's Bylaws, a
stockholder of record may nominate someone for director or may propose other
action to be voted on at an annual meeting. Article V of the Company's Bylaws
provides in pertinent part as follows:
"SECTION 1. ANNUAL MEETINGS. The annual meeting of the stockholders for the
election of Directors and for the transaction of such other business as may be
properly brought before the meeting, shall be held each year on such day, at
such time and place, either within or without the state of incorporation, as
shall be determined in advance by the Board of Directors.
"At an annual meeting of stockholders, the only business to be voted on by
stockholders shall be business specified in the notice of the meeting, or
business otherwise specified by the Board of Directors, or business properly
brought before the meeting by a stockholder eligible to vote at the meeting.
"To be properly brought before the meeting by a stockholder, the business
must be legally proper and written notice thereof must have been filed with
the Secretary of the Corporation at least sixty days but not more than ninety
days prior to the first anniversary of the most recent annual meeting, and
containing the following information as applicable:
"(a) All notices by a stockholder hereunder shall contain (i) the
stockholder's name as it appears in the Corporation's records, (ii) the
stockholder's business address and residence address, and (iii) the class
and number of shares of stock of the Corporation which are directly or
indirectly beneficially owned by the stockholder.
"(b) Notices in which a stockholder proposes the nomination of a person
for election as Director shall also contain (i) the proposed nominee's
name, age, business address and residence address, (ii) the proposed
nominee's principal occupation currently and for the previous five years,
(iii) the class and number of shares of stock of the Corporation which are
directly or indirectly beneficially owned by the proposed nominee, and (iv)
any other information about the proposed nominee which is required to be
disclosed in proxy solicitation pursuant to regulations under the
Securities Exchange Act of 1934 as amended, including but not limited to
the proposed nominee's consent to the nomination.
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"(c) Notices in which a stockholder proposes a matter other than a
nomination for Director shall also contain a clear and concise statement of
the proposal and the stockholder's reasons for supporting it.
"The filing of a stockholder notice as required above shall not, in and of
itself, constitute the making of the nomination or proposal described therein.
Nothing in these Bylaws shall affect the right of a stockholder to request
inclusion of a proposal in the Corporation's proxy statement pursuant to
regulations under the Securities Exchange Act of 1934 as amended.
"If the person presiding at the meeting determines that any proposed
business has not been properly brought before the meeting, he shall declare
such business out of order and such business shall not be conducted at the
meeting."
Applicable SEC rules and regulations provide that the Company is not
required to include a stockholder proposal in its proxy materials unless it is
received by a specified date. In order for a stockholder proposal to be
considered for inclusion in the Company's 1997 proxy materials, the proposal
must be received by the Secretary of the Company on or before its close of
business on November 27, 1996.
SOLICITATION OF PROXIES
-------------------------------------------------
The Company has provided proxy materials to brokers, banks, custodians,
nominees and fiduciaries and requested that such materials be promptly
forwarded to the beneficial owners of Common Stock registered in the name of
such brokers, banks, custodians, nominees and fiduciaries. In addition,
solicitation of proxies may be made by directors, officers or employees of the
Company by personal interview, mail, telephone, telegraph or facsimile
telecommunication. Georgeson & Company Inc. has been retained to assist in the
distribution to and solicitation of proxies from stockholders, brokers, banks
and nominees for a base fee of $7,000 plus reasonable out-of-pocket expenses.
The cost of soliciting proxies and related services will be borne by the
Company.
By Order of the Board of Directors
William C. Lemmer
Vice President, General Counsel and
Secretary
13155 Noel Road
Dallas, Texas 75240-5067
March 27, 1996
29
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EXHIBIT A
ORYX ENERGY COMPANY
EQUITY AND DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1. ESTABLISHMENT AND PURPOSE. Oryx Energy Company, a Delaware
corporation (the "Company"), hereby establishes this Oryx Energy Company
Equity and Deferred Compensation Plan for Non-Employee Directors (the "Plan").
The purposes of the equity compensation features of the Plan are to encourage
non-employee directors of the Company to acquire shares of the Company's
common stock, and thereby to align their interests more closely with the
interests of the other stockholders of the Company, and to encourage the
highest level of director performance by providing the non-employee directors
with a more direct interest in the Company's attainment of its financial
goals. The purpose of the elective deferral features of the Plan is to permit
non-employee directors of the Company to defer to the date of termination of
their service as directors of the Company or other fixed date all or part of
their regular cash compensation.
SECTION 2. CERTAIN DEFINITIONS. For purposes of the Plan, the following
terms shall have the indicated meanings:
(a) "annual retainer" shall have the meaning specified in Section 6(a)
hereof.
(b) "Average Share Price" means the average of the Fair Market Value of the
Common Stock on each of the following days within the period for which Average
Share Price is being determined under the Plan: (i) the last Trading Day of
the calendar quarter ending on March 31; (ii) the last Trading Day of the
calendar quarter ending on June 30; (iii) the last Trading Day of the calendar
quarter ending on September 30; and (iv) the last Trading Day of the calendar
quarter ending on December 31 (as appropriately adjusted to take into account
any stock dividend, split, or combination during such period with respect to
the Common Stock).
(c) "Board of Directors" means the Board of Directors of the Company.
(d) "Cash Compensation" means the cash compensation earned by an Outside
Director for his services as a director of the Company.
(e) "cash retainer" shall have the meaning specified in Section 6(a) hereof.
(f) "Cash Unit" shall have the meaning specified in Section 8(d) hereof.
(g) "Common Stock" means the Common Stock, par value $1.00 per share, of the
Company, or any stock or other securities of the Company hereafter issued or
issuable in substitution or exchange for the Common Stock.
(h) "Compensation Committee" means the Compensation Committee of the Board
of Directors.
(i) "Deferred Compensation Account" shall have the meaning specified in
Section 8(d) hereof.
(j) "Fair Market Value" of the Common Stock on any Trading Day shall be the
average of the high and low sales prices of the Common Stock for such day, or
if no such sale is made on such day, the average of the closing bid and asked
prices of the Common Stock for such day, in each case as officially reported
on the New York Stock Exchange (or, if the Common Stock is not then listed or
admitted to trading on the New York Stock Exchange, the principal national
stock exchange or stock market on which the Common Stock is then listed or
admitted to trading).
(k) "Initial Restricted Period" shall have the meaning specified in Section
7(a)(i) hereof.
(l) "Interest Equivalent" shall have the meaning specified in Section 8(d)
hereof.
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(m) "Outside Director" means an individual duly elected or chosen as a
director of the Company who is not also an officer or employee of the Company
or its subsidiaries.
(n) "Participant" shall have the meaning specified in Section 8(a) hereof.
(o) "plan quarter" means each three-month period ending on July 31, October
31, January 31, and April 30 of each Plan Year, except that the plan quarters
for the first Plan Year hereunder shall be the three-month period ending on
September 30, 1996, the three-month period ending on December 31, 1996, and
the four-month period ending on April 30, 1997.
(p) "Plan Year" means each 12-month period commencing on May 1 and ending on
and including the next following April 30, except that the first Plan Year
hereunder shall commence on July 1, 1996 and end on and include April 30,
1997.
(q) "Required Share Amount" means an amount of money constituting 50% of an
Outside Director's annual retainer earned by such Outside Director for his
services as a director of the Company for a Plan Year, which amount is payable
in shares of Common Stock pursuant to Section 6(c) hereof. The Required Share
Amount is not Cash Compensation for purposes of the Plan.
(r) "Restricted Period" shall have the meaning specified in Section 7(a)(i)
hereof.
(s) "Restricted Shares" means shares of Common Stock issued pursuant to the
Plan that are subject to the restrictions imposed by the provisions of Section
7 hereof.
(t) "Share Award" means an award, grant, sale, or other issuance of Shares,
Restricted Shares or Unrestricted Shares to an Outside Director pursuant to
the provisions of the Plan.
(u) "Shares" means shares of Common Stock issued pursuant to the Plan that
are not subject to the restrictions imposed by the provisions of Section 7
hereof, but are subject to the restrictions on transfer set forth in Section
10 hereof.
(v) "Term of Office" means the term of office as a director of the Company
for which the Outside Director has been elected pursuant to and in accordance
with the provisions of the certificate of incorporation and bylaws of the
Company.
(w) "Trading Day" means any day on which the stock exchange or stock market
referred to in Section 2(j) hereof is open for trading on a regular basis.
(x) "Unrestricted Shares" means shares of Common Stock issued pursuant to
the Plan that are not subject to the restrictions imposed by the provisions of
Section 7 or 10 hereof.
(y) "Voluntary Share Amount" means the amount of Cash Compensation
(including the cash retainer) earned by an Outside Director for a Plan Year
which the Outside Director elects to apply to the purchase of shares of Common
Stock pursuant to Section 6(b) hereof.
SECTION 3. PLAN ADMINISTRATION. The Compensation Committee shall be
responsible for the administration of the Plan. However, the Compensation
Committee shall have no authority, discretion, or power to select the Outside
Directors who will receive Share Awards, determine the Share Awards to be made
pursuant to the Plan, the number of Shares, Restricted Shares or Unrestricted
Shares to be issued thereunder, or the time at which Share Awards are to be
made, establish the duration or nature of the restrictions applicable to
Shares or Restricted Shares, or alter any other terms or conditions specified
in the Plan, except in the sense of administering the Plan subject to the
express provisions hereof, including Section 12 hereof. Subject to the
foregoing limitations, the Compensation Committee is authorized to interpret
the Plan, prescribe, amend, and rescind rules and regulations relating to the
Plan, provide for conditions and assurances deemed necessary or
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advisable to protect the interests of the Company in connection with the
operation of the Plan, and make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. No member of the Board of
Directors or the Compensation Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any agreement
entered into pursuant to the Plan. The determinations, interpretations, and
other actions of the Board of Directors and the Compensation Committee
pursuant to the provisions of the Plan shall be binding and conclusive for all
purposes and on all persons.
SECTION 4. STOCK SUBJECT TO THE PLAN.
(a) Number of Shares. Three hundred thousand (300,000) shares of Common
Stock are authorized for issuance under the Plan in accordance with the
provisions of the Plan. Shares of Common Stock that are issued as Shares,
Restricted Shares or Unrestricted Shares shall be applied to reduce the
maximum number of shares of Common Stock remaining available for use under the
Plan. Any Restricted Shares that are forfeited to the Company pursuant to the
provisions of Section 7(b) hereof shall again be available for use under the
Plan. Any shares of Common Stock issuable to an Outside Director under the
Plan that for any reason are not issued to the Outside Director shall
automatically become available for use under the Plan. The Company shall at
all times during the term of the Plan retain as authorized and unissued Common
Stock at least the number of shares from time to time required under the
provisions of the Plan or otherwise assure itself of its ability to perform
its obligations hereunder. Shares of Common Stock issued pursuant to the Plan
may be shares of original issuance or treasury shares or a combination of the
foregoing, as the Board of Directors, in its discretion, shall from time to
time determine.
(b) Adjustments Upon Changes in Common Stock. In the event the Company shall
effect a split of the Common Stock or a dividend payable in Common Stock, or
in the event the outstanding Common Stock shall be combined into a smaller
number of shares, (i) the maximum number of shares of Common Stock that may be
issued under the Plan shall be increased or decreased proportionately and (ii)
the Board of Directors shall make an appropriate adjustment in the number of
shares of Common Stock then subject to issuance under Sections 5(b) and 5(c)
hereof. In the event of a reclassification of the Common Stock not covered by
the foregoing, or in the event of a liquidation or reorganization (including a
merger, consolidation, or sale of assets) of the Company, the Board of
Directors shall make such adjustments, if any, as it may deem appropriate in
the number and kind of shares that are authorized for issuance or are issuable
pursuant to the Plan.
SECTION 5. INITIAL AND ANNUAL AUTOMATIC GRANTS OF COMMON STOCK.
(a) Initial Grants to Current Directors. Effective as of the next business
day after the 1996 annual meeting of stockholders of the Company, the Company
shall issue 5,500 shares of Common Stock to each person who is an Outside
Director on such date.
(b) Initial Grants to Newly Elected Directors. Commencing after the date of
the 1996 annual meeting of stockholders of the Company, 5,000 shares of Common
Stock shall be issued by the Company automatically to each Outside Director
who is newly elected to the Board of Directors after such date, irrespective
of whether such Outside Director is elected by the Board of Directors or by
the stockholders. The effective date of issuance of such shares shall be the
effective date of such Outside Director's election to the Board of Directors.
For purposes of this Section 5(b), the term "newly elected to the Board of
Directors" shall mean that the Outside Director was not serving as a director
of the Company immediately prior to the time of his election in respect of
which such shares are issued.
(c) Annual Grants. Beginning with the year 1997, 500 shares of Common Stock
shall be issued by the Company automatically effective as of the date of each
annual meeting of stockholders of the Company, to each person who (i) is an
Outside Director on the date of and immediately following such annual meeting
and (ii) has served in that capacity for at least six months immediately
preceding the date of such annual meeting.
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(d) Form of Share Awards. Each Share Award granted to an Outside Director
pursuant to this Section 5 shall be made either (i) all in Restricted Shares
or (ii) all in Shares, as shall be designated by the recipient of such award
by notice in writing delivered to the Company (A) prior to March 15, 1996 (in
the case of an award under Section 5(a) hereof), (B) prior to the effective
date of issuance of such shares (in the case of an award under Section 5(b)
hereof), or (C) prior to the January 1 immediately preceding the annual
meeting of stockholders in respect of which the award is made (in the case of
an award under Section 5(c) hereof). All such designations shall be on a form
prescribed for this purpose by the Compensation Committee and shall be
irrevocable. If no such designation is made with respect to a Share Award
granted under this Section 5, such award shall be made all in Shares.
(e) Declinations. Any Outside Director may decline to accept any Share Award
granted to him pursuant to this Section 5 by giving written notice to the
Company of his election to decline to accept such award.
SECTION 6. SHARE AWARDS APPLICABLE TO RETAINER AND OTHER CASH COMPENSATION.
(a) Retainer; Required Share Amount. The amount of the retainer to be paid
to each Outside Director for each Plan Year (the "annual retainer") shall be
determined by the Board of Directors from time to time; 50% of the annual
retainer shall be the cash component of the retainer, payable in cash as Cash
Compensation (the "cash retainer"), and the other 50% of the annual retainer
shall be the equity component of the retainer, payable in shares of Common
Stock as the Required Share Amount. The cash retainer for each Plan Year shall
be payable in installments as of the last day of each plan quarter of the Plan
Year in arrears. An Outside Director must be serving as an Outside Director on
the last day of the plan quarter in order to earn his cash retainer for such
plan quarter; provided, however, that an Outside Director serving in such
capacity on such day who has served in such capacity for less than the entire
plan quarter shall have his cash retainer for such plan quarter pro-rated
based on his number of days of service as an Outside Director during such plan
quarter. An Outside Director must be serving as an Outside Director on the
last day of the Plan Year in order to earn his Required Share Amount for such
year; provided, however, that an Outside Director serving in such capacity on
such day who has served in such capacity for less than the entire Plan Year
shall have his Required Share Amount for such Plan Year pro-rated based on his
number of days of service as an Outside Director during such Plan Year.
(b) Voluntary Share Amount. For any Plan Year, an Outside Director may elect
to have up to 100% of his cash retainer earned for such Plan Year and any
other Cash Compensation earned by him for such Plan Year for his services as a
director of the Company, which amounts have not been deferred by the Outside
Director pursuant to the provisions of Section 8 hereof (collectively referred
to herein as his Voluntary Share Amount), applied to the purchase of shares of
Common Stock pursuant to the provisions of Section 6(c) hereof. An Outside
Director must notify the Company in writing of such election prior to the
first day of the Plan Year for which the election is made (or prior to such
later date as may be approved by the Compensation Committee); provided,
however, that a newly elected Outside Director (within the meaning of Section
5(b) hereof) may make such an election prior to the commencement of such
Outside Director's initial Term of Office with respect to Cash Compensation
earned by him in the balance of the Plan Year of his initial election to the
Board of Directors. Unless otherwise determined by the Compensation Committee,
a separate election must be made for each Plan Year. An election made pursuant
to this Section 6(b) for a Plan Year shall be irrevocable from and after the
first day of such Plan Year; provided, however, that an election made pursuant
to this Section 6(b) during a Plan Year for the remaining portion of such Plan
Year shall be irrevocable from and after the date the election is made. Such
elections shall be on a form prescribed for this purpose by the Compensation
Committee.
(c) Issuance of Shares. Promptly following the end of each Plan Year, the
Company shall, subject to the further provisions of this Section 6, issue to
each Outside Director, effective as of the last day of such Plan Year:
(A) a number of whole shares of Common Stock determined by dividing (x)
the Required Share Amount earned by such Outside Director for such Plan
Year by (y) the Average Share Price of the Common Stock for such Plan Year
or, if such Outside Director did not serve as an Outside Director during
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the entire Plan Year, for that portion of the Plan Year during which he
served in that capacity (for purposes of calculating such Average Share
Price, the Outside Director shall always be deemed to have served in that
capacity for at least the last plan quarter of the Plan Year),
and
(B) a number of whole shares of Common Stock determined by dividing (x)
such Outside Director's Voluntary Share Amount, if any, for such Plan Year
by (y) the Average Share Price of the Common Stock for such Plan Year or,
if such Outside Director did not serve as an Outside Director during the
entire Plan Year, for that portion of the Plan Year during which he served
in that capacity (for purposes of calculating such Average Share Price, the
Outside Director shall always be deemed to have served in that capacity for
at least the last plan quarter of the Plan Year). The issuance of shares of
Common Stock to the Outside Director pursuant to clause (A) above and the
issuance of shares of Common Stock to the Outside Director pursuant to
clause (B) above shall each be deemed to be a separate Share Award made to
the Outside Director.
No fractional shares of Common Stock shall be issued by the Company pursuant
to this Section 6(c), and no cash payment or other adjustment shall be made in
respect of any such fractional share that would otherwise be issuable.
(d) Eligibility. An Outside Director must be serving as an Outside Director
on the last day of the Plan Year in order to be eligible to receive shares of
Common Stock pursuant to Section 6(c) hereof in respect of his Required Share
Amount and Voluntary Share Amount, if any, for such Plan Year. Any Outside
Director who becomes ineligible to receive shares of Common Stock in respect
of his Voluntary Share Amount for a Plan Year because his service as an
Outside Director terminated prior to the last day of such Plan Year shall be
paid any earned amounts of such Voluntary Share Amount in cash, without
interest, as promptly as practicable following the date of such termination of
service, and the election made by such Outside Director with respect to such
Voluntary Share Amount pursuant to Section 6(b) hereof shall be null and void
effective as of the date of such termination of service.
(e) Form of Share Awards. Each Share Award made to an Outside Director with
respect to his Required Share Amount for a Plan Year pursuant to Section 6(c)
hereof shall be made either (i) all in Restricted Shares or (ii) all in
Shares, and each Share Award made to an Outside Director with respect to his
Voluntary Share Amount, if any, for a Plan Year pursuant to Section 6(c)
hereof shall be made either (i) all in Restricted Shares or (ii) all in
Unrestricted Shares, in each case as shall be designated by the Outside
Director by notice in writing delivered to the Company prior to the first day
of such Plan Year; provided, however, that a newly elected Outside Director
(within the meaning of Section 5(b) hereof) may make such designations prior
to the commencement of such Outside Director's initial Term of Office with
respect to his Required Share Amount and Voluntary Share Amount, if any,
earned by him in the balance of the Plan Year of his initial election to the
Board of Directors. Unless otherwise determined by the Compensation Committee,
a separate designation must be made for each Plan Year. A designation made
pursuant to this Section 6(e) for a Plan Year shall be irrevocable from and
after the first day of such Plan Year; provided, however, that a designation
made pursuant to this Section 6(e) during a Plan Year for the remaining
portion of such Plan Year shall be irrevocable from and after the date the
designation is made. Such designations shall be on a form prescribed for this
purpose by the Compensation Committee. If no such designation is made with
respect to a Share Award made under this Section 6, such award shall be made
all in Shares (in the case of an award with respect to a Required Share
Amount) or all in Unrestricted Shares (in the case of an award with respect to
a Voluntary Share Amount).
(f) Effectiveness. The provisions of this Section 6 shall be effective for
Required Share Amounts and Cash Compensation earned by Outside Directors on
and after July 1, 1996.
SECTION 7. RESTRICTIONS ON RESTRICTED SHARES.
(a) Restricted Period. (i) All Restricted Shares issued to an Outside
Director pursuant to the Plan shall be subject to a restricted period, which
shall commence on the effective date of issuance of such Restricted
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Shares and end on April 30 of the calendar year in which the Outside
Director's then current Term of Office is scheduled to expire (the "Initial
Restricted Period"). The term "Restricted Period", as hereinafter used, means
(A) the Initial Restricted Period and (B) the Initial Restricted Period as it
may be extended pursuant to the following provisions of this Section 7(a)(i).
Each Outside Director to whom Restricted Shares have been issued shall have
the right to extend the Restricted Period applicable to such Restricted Shares
so that such Restricted Period ends on April 30 of the calendar year in which
the Outside Director's next succeeding Term of Office (assuming for this
purpose that he continues to serve as a director of the Company) would be
scheduled to expire, provided that such Outside Director notifies the Company
in writing of such extension on or prior to April 30 of the calendar year
immediately preceding the calendar year of expiration of the then current
Restricted Period. Subject to the foregoing provisions of this Section
7(a)(i), such right to extend the Restricted Period may be exercised on any
one or more occasions. An election to extend the Restricted Period shall be
irrevocable.
(ii) Notwithstanding the foregoing provisions of Section 7(a)(i) hereof:
(A) With respect to (x) Restricted Shares issued pursuant to Section 5(b)
or 6(c) hereof to an Outside Director whose then current Term of Office is
scheduled to expire in the calendar year of the effective date of issuance
of such shares, (y) Restricted Shares issued pursuant to Section 5(b)
hereof on or after November 1 of a calendar year, but prior to the end of
such calendar year, to an Outside Director whose then current Term of
Office is scheduled to expire in the calendar year next following the
calendar year of the effective date of issuance of such shares and (z)
Restricted Shares issued pursuant to Section 9(b) hereof to an Outside
Director whose then current Term of Office is scheduled to expire in the
calendar year next following the calendar year of the effective date of
issuance of such shares, the Initial Restricted Period of such shares shall
end on April 30 of the calendar year in which the Outside Director's next
succeeding Term of Office (assuming for this purpose that he continues to
serve as a director of the Company) would be scheduled to expire.
(B) With respect to (x) Restricted Shares issued pursuant to Section 5(a)
or 5(c) hereof to an Outside Director whose then current Term of Office is
scheduled to expire in the calendar year next following the calendar year
of the effective date of issuance of such shares and (y) Restricted Shares
issued pursuant to Section 5(b) hereof on or after April 30 of a calendar
year, but prior to November 1 of such calendar year, to an Outside Director
whose then current Term of Office is scheduled to expire in the calendar
year next following the calendar year of the effective date of issuance of
such shares, the Initial Restricted Period of such shares shall end on
either (1) April 30 of the calendar year in which the Outside Director's
then current Term of Office is scheduled to expire or (2) April 30 of the
calendar year in which the Outside Director's next succeeding Term of
Office (assuming for this purpose that he continues to serve as a director
of the Company) would be scheduled to expire, as shall be designated by the
Outside Director by notice in writing delivered to the Company on or prior
to the effective date of issuance of such shares. If no such designation is
made, the Initial Restricted Period of such shares shall end on the date
specified in clause (1) of the preceding sentence. All such designations
shall be irrevocable on and after the effective date of issuance of such
shares.
(b) Forfeiture. Restricted Shares issued to an Outside Director pursuant to
the Plan shall be forfeited to the Company at no cost to the Company if the
Outside Director's service as a director of the Company terminates prior to
the expiration or termination of the Restricted Period applicable to such
shares; provided, however, that the Restricted Shares shall become fully
vested and the Restricted Period applicable thereto shall terminate upon (i)
the Outside Director's termination of service as a director of the Company
during the Restricted Period due to death, Disability (as defined in Section
7(h) hereof), or a Permitted Event (as defined in Section 7(h) hereof) or (ii)
the occurrence of a Corporate Change (as defined in Section 7(h) hereof)
during the Restricted Period. Unless and until Restricted Shares are delivered
to the Outside Director upon vesting, the Restricted Shares shall not be sold,
assigned, transferred, discounted, exchanged, pledged, or otherwise encumbered
or disposed of by the Outside Director in any manner.
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(c) Stock Certificates. The Company shall issue, in the name of each Outside
Director to whom Restricted Shares have become issuable pursuant to the Plan
(or, at the option of the Company, in the name of a nominee of the Company),
stock certificates representing the total number of Restricted Shares to be
issued to the Outside Director, as soon as reasonably practicable after the
effective date of issuance of such shares. The Company or its agent, at the
direction of the Compensation Committee, shall hold such certificates,
together with stock powers and any other instrument of transfer reasonably
requested by the Company duly endorsed in blank, for the Outside Director's
benefit until such time as the Restricted Shares represented by such
certificates are forfeited to the Company or the restrictions thereon
terminate.
(d) Rights as Stockholder. Upon the issuance of a certificate representing
Restricted Shares to or on behalf of an Outside Director, the Outside Director
shall become the owner thereof for all purposes and shall have all rights as a
stockholder, including voting rights and the right to receive dividends and
distributions, with respect to such shares, subject to the restrictions of the
Plan and any restrictions imposed by law. If the Company shall pay or declare
a dividend or make a distribution of any kind, whether due to a
reorganization, recapitalization, or otherwise, with respect to the shares of
Common Stock constituting the Restricted Shares, then the Company shall pay or
make such dividend or other distribution with respect to the Restricted
Shares; provided, however, that the cash, stock or other securities, and other
property constituting such dividend or other distribution shall be held by the
Company subject to the restrictions applicable to the Restricted Shares until
the Restricted Shares with respect to which such dividend or other
distribution was paid or made are either vested or forfeited. If any
Restricted Shares with respect to which such dividend or distribution was paid
or made do not vest but instead are forfeited pursuant to the provisions
hereof, then the Outside Director shall not be entitled to receive such
dividend or distribution with respect to such forfeited shares and such
dividend or distribution with respect to such forfeited shares shall likewise
be forfeited and automatically transferred to and reacquired by the Company.
If any Restricted Shares with respect to which such dividend or distribution
was paid or made become vested pursuant to the provisions hereof, then the
Outside Director shall be entitled to receive such dividend or distribution
with respect to such vested shares, without interest, and such dividend or
distribution with respect to such vested shares shall likewise be delivered to
the Outside Director.
(e) Adjustments. If any of the following events shall occur at any time
while Restricted Shares are outstanding and prior to the vesting or forfeiture
thereof, the following adjustments shall be made in the number of shares of
Common Stock then constituting such Restricted Shares, as appropriate:
(i) If the Company pays a dividend on its outstanding shares of Common
Stock in shares of Common Stock or subdivides its outstanding shares of
Common Stock into a greater number of shares of Common Stock, the number of
shares of Common Stock then constituting the Restricted Shares shall be
proportionately increased. Conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the
number of shares of Common Stock then constituting the Restricted Shares
shall be proportionately reduced. An adjustment made pursuant to this
Section 7(e)(i) shall become effective as of the record date in the case of
a dividend and shall become effective immediately after the effective date
in the case of a subdivision or combination.
(ii) In case of any recapitalization or reclassification of the Common
Stock, or any merger or consolidation of the Company with or into one or
more other corporations, or any sale of all or substantially all the assets
of the Company, as a result of which the holders of Common Stock receive
other stock, securities, or property in lieu of or in addition to, but on
account of, their shares of Common Stock, (A) such other stock, securities,
or property allocable (as provided in clause (B) below) to the shares of
Common Stock then constituting the Restricted Shares shall be paid and
delivered with respect to such Restricted Shares, subject to the same
restrictions applicable to such Restricted Shares, and (B) the Company
shall make or cause to be made lawful and adequate provision whereby, upon
the vesting of the Restricted Shares after the record date for the
determination of the holders of Common Stock entitled to receive such other
stock, securities, or property, the Outside Director shall receive, in lieu
of or in addition to the Restricted Shares that have vested, as the case
may be, the shares of stock, securities, or property that would have been
allocable to such Restricted Shares had such shares vested immediately
prior to such
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record date. The subdivision or combination of shares of Common Stock at
any time outstanding into a greater or smaller number of shares of Common
Stock shall not be deemed to be a recapitalization or reclassification of
the Common Stock for the purposes of this Section 7(e)(ii).
(f) Termination of Restrictions. Upon the expiration or termination of the
Restricted Period applicable to Restricted Shares, the restrictions applicable
to the Restricted Shares that have not theretofore been forfeited shall
terminate, and as soon as practicable thereafter, a stock certificate for the
number of Restricted Shares with respect to which the restrictions have
terminated, together with any dividends or other distributions with respect to
such shares then being held by the Company pursuant to the provisions of this
Section 7, shall be delivered, free of all such restrictions, to the Outside
Director or his beneficiary or estate, as the case may be.
(g) Restricted Share Agreements. Each recipient of a Share Award relating to
Restricted Shares made pursuant to the Plan shall, as a condition precedent to
the issuance of the Restricted Shares to or on behalf of such person, enter
into an agreement with the Company, in such form as the Compensation Committee
shall prescribe and which is consistent with the provisions of the Plan,
setting forth or incorporating the restrictions, terms, and conditions of the
Share Award. In the event of any inconsistency between the provisions of the
Plan and any such agreement, the provisions of the Plan shall govern.
(h) Certain Definitions. For purposes of this Section 7, the following terms
shall have the indicated meanings:
Disability: The "Disability" of an Outside Director shall be deemed to
have occurred if the Outside Director shall become unable to continue the
proper performance of his duties as a director of the Company on a full-
time basis as a result of his physical or mental incapacity.
Permitted Event: A "Permitted Event" shall be deemed to have occurred if:
(i) the Outside Director shall have resigned as a director of the Company
because the Outside Director is unable to continue the proper performance
of his duties as a director of the Company as a result of an injury or
illness affecting a member of the Outside Director's immediate family and
such inability is likely to exist for a period of six months or more; (ii)
the Outside Director shall have retired as a director of the Company
because he has reached the mandatory retirement age for directors of the
Company as established by Company policy; (iii) the Outside Director, after
being nominated by the Board of Directors, shall not be re-elected by the
stockholders of the Company in an election of directors; or (iv) the
Outside Director's directorship shall have ceased at the end of his term
because such Outside Director was not nominated for re-election as a
director of the Company in connection with an election of directors.
Corporate Change: A "Corporate Change" shall be deemed to have occurred
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 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
definition 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 or consolidation 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
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Directors of the Company. 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.
SECTION 8. DEFERRAL OF CASH COMPENSATION. Outside Directors shall have the
right to defer the receipt of their Cash Compensation in accordance with the
following provisions of this Section 8.
(a) Election to Defer. An Outside Director may elect to defer the receipt of
all or a portion of his Cash Compensation (other than his Voluntary Share
Amount) for a Plan Year in accordance with the provisions of this Section 8 by
filing a written election to defer with the Compensation Committee. Such
election shall be made on a form or forms prescribed for this purpose by the
Compensation Committee. Such election must include the following: (i) the
percentage of Cash Compensation to be deferred; (ii) an irrevocable election
of a method of payment as provided in Section 8(e) hereof; and (iii) a
designation of beneficiary as provided in Section 8(f) hereof. Except as
provided in Section 8(c) hereof, a deferral election shall apply only to Cash
Compensation to be earned in the Plan Year next following the Plan Year in
which the election is made. An election to defer made under this Section 8
shall be irrevocable. For purposes of the Plan, the term "Participant" means
an Outside Director who has elected to defer the receipt of his Cash
Compensation in accordance with the provisions of this Section 8.
(b) Amount of Deferral. The amount of Cash Compensation to be deferred in
any Plan Year shall be designated by the Outside Director as a percentage of
his Cash Compensation in integral multiples of 5%, but shall not be less than
10%.
(c) Time of Election. Except as otherwise determined by the Compensation
Committee, an election to defer Cash Compensation hereunder must be received
by the Compensation Committee prior to the commencement of the Plan Year in
which the Cash Compensation is earned; provided, however, that a newly elected
Outside Director (within the meaning of Section 5(b) hereof) may make a
deferral election prior to the commencement of such Outside Director's initial
Term of Office with respect to Cash Compensation earned by him in the balance
of the Plan Year of his initial election to the Board of Directors. Unless
otherwise determined by the Compensation Committee, a separate deferral
election must be made for each Plan Year. A deferral election by an Outside
Director with respect to Cash Compensation in a given year will not preclude a
different action by the Outside Director with respect to Cash Compensation in
subsequent years.
(d) Deferred Compensation Accounts. Cash Compensation deferred by a
Participant pursuant to this Section 8 shall be credited to an account
("Deferred Compensation Account") established by the Company for such
Participant. Cash Units (as defined below) in an amount equal to the deferred
Cash Compensation shall be credited to the Participant's Deferred Compensation
Account at the time the deferred Cash Compensation would otherwise have been
paid had no election to defer been made. As additional deferred compensation
for Participants with Cash Units credited to their Deferred Compensation
Accounts, the Company shall credit a Participant's Deferred Compensation
Account on a quarterly basis with an Interest Equivalent (as defined below).
The amounts credited to a Participant's Deferred Compensation Account in
accordance with this Section 8(d) shall represent the total amount of the
Company's liability to the Participant for the payment of deferred
compensation under this Section 8. For purposes of this Section 8, (i) a "Cash
Unit" means the entry in a Deferred Compensation Account of a credit equal to
One Dollar and (ii) an "Interest Equivalent" means the entry in a Deferred
Compensation Account of an interest credit with respect to a Cash Unit, the
interest factor being equal to the quarterly rate of return generated under
the Stable Value Fund of the Company's Capital Accumulation Plan (or such
successor or other fund within the Capital Accumulation Plan as the
Compensation Committee may approve).
(e) Payment of Deferred Compensation. All payments of a Participant's
Deferred Compensation Account shall be made at, or shall commence on, the
first day of the calendar year selected by the Participant in accordance with
the provisions of Section 8(a) hereof and this Section 8(e). The date on which
payment will commence must be designated by the Outside Director. The Outside
Director may elect to defer the receipt of his Cash Compensation to: (a) the
first day of any calendar year that is at least one year after the calendar
year
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in which the Cash Compensation is earned; or (b) the first day of the calendar
year following (i) the calendar year he retires as a director of the Company;
(ii) the calendar year his membership on the Board of Directors terminates; or
(iii) the calendar year of his death. The benefit commencement date may not be
later than the third calendar year following the attainment of mandatory
retirement age for directors of the Company. Upon the death of a Participant
prior to the final payment of all amounts credited to his Deferred
Compensation Account, the balance of the Deferred Compensation Account shall
be paid in accordance with the provisions of Section 8(f) hereof commencing on
the first day of the calendar year following the year of death. A Participant
shall have the option of selecting either a single payment schedule or a
series of annual installments (not exceeding ten), provided such election is
irrevocable and made at the date of deferral. A Participant shall receive in
cash all deferred compensation credited to his Deferred Compensation Account.
(f) Designation of Beneficiary. Each Participant shall name a beneficiary to
receive any payments due him at the time of his death, with the right to
change such beneficiary at any time. In case of a failure to designate a
beneficiary or the death of the designated beneficiary without a designated
successor, such payments shall be made to the person or persons designated as
beneficiary in the designation most recently filed by the Participant under
the Directors Group Life Insurance Plan of the Company, or if no such
designation has been made or the Participant is not participating in such
plan, then to the surviving spouse of a deceased Participant, or, if there is
no surviving spouse, the children of the Participant in equal shares (the
share of any child who predeceases the Participant to go in equal shares to
the issue of such deceased child), or if there is no surviving spouse,
children, or issue of such children, the estate of the Participant. No
designation of beneficiary shall be valid unless in writing signed by the
Participant, dated and filed with the Compensation Committee. Upon the
Participant's death, any balance in his Deferred Compensation Account shall be
payable under the method and form elected by the Participant or in such other
manner as the Compensation Committee may determine in its sole discretion.
(g) Source of Payments. All payments of deferred compensation under this
Section 8 shall be made in cash from the general funds of the Company, and the
Company shall be under no obligation to segregate any assets in connection
with the maintenance of a Deferred Compensation Account. Nothing contained in
the Plan and no action taken pursuant to the Plan shall create or be construed
to create a trust of any kind in favor of a Participant or any other person or
a fiduciary relationship between the Company and a Participant. Title to the
beneficial ownership of any assets, whether cash or investments, that the
Company may designate to pay the amounts credited to Deferred Compensation
Accounts shall at all times remain in the Company, and Participants shall have
no property interest whatsoever in any specific assets of the Company. A
Participant's interest in his Deferred Compensation Account shall be limited
to the right to receive payments pursuant to the terms of the Plan, and such
right shall be no greater than the right of any other unsecured general
creditor of the Company.
(h) Effectiveness. Except as otherwise provided in Section 9 hereof, the
provisions of this Section 8 shall be effective for Cash Compensation earned
by Outside Directors on and after July 1, 1996.
SECTION 9. TERMINATION OF DIRECTORS' DEFERRED COMPENSATION PLAN.
(a) Termination; Transfer of Units. Effective as of July 1, 1996, the Oryx
Energy Company Directors' Deferred Compensation Plan, as amended and restated
effective September 7, 1995 (the "Deferred Compensation Plan"), shall
terminate, and all cash units and share units credited as of such date to an
Outside Director's deferred compensation account thereunder shall
automatically be transferred and credited to a Deferred Compensation Account
established for such Outside Director under Section 8 hereof. Thereafter,
except as provided in Section 9(b) hereof, such cash units shall be governed
by the provisions of Section 8 hereof to the same extent as if they had
originally been credited as Cash Units under the Plan. Such cash units are
herein referred to as "Subject Cash Units".
(b) Conversion of Subject Cash Units. Each Outside Director with Subject
Cash Units credited to his Deferred Compensation Account under the Plan may
elect to have up to 100% of the Subject Cash Units
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credited to his account as of July 1, 1996 applied to the purchase of
Restricted Shares in accordance with the provisions of this Section 9(b)
effective as of July 1, 1996; provided that the Outside Director must notify
the Company in writing of such election on or prior to July 1, 1996, which
election will be irrevocable on and after such date. Such election shall be on
a form prescribed for this purpose by the Compensation Committee. Promptly
following, and effective as of, July 1, 1996, the Company shall, subject to
the further provisions of this Section 9(b), issue to each Outside Director
who has made an election to purchase Restricted Shares pursuant to this
Section 9(b) a number of whole Restricted Shares determined by dividing (x)
the amount of the Subject Cash Units that the Outside Director elected to have
applied to the purchase of Restricted Shares by (y) the Fair Market Value of
the Common Stock on July 1, 1996. No fractional shares of Common Stock shall
be issued by the Company pursuant to this Section 9(b), and no cash payment or
other adjustment shall be made in respect of any such fractional share that
would otherwise be issuable. An Outside Director must be serving as an Outside
Director on July 1, 1996 in order to be eligible to receive Restricted Shares
pursuant to this Section 9(b). An election made pursuant to this Section 9(b)
by an Outside Director who becomes ineligible to receive Restricted Shares
pursuant to this Section 9(b) because his service as an Outside Director
terminated prior to July 1, 1996 shall be null and void effective as of the
date of such termination of service. Any Subject Cash Units (or portion
thereof) not converted into Restricted Shares pursuant to this Section 9(b)
shall remain subject to the provisions of Section 8 hereof.
(c) Share Units. An Outside Director with share units credited to his
Deferred Compensation Account under the Plan shall continue to hold such units
subject to the terms and conditions that were in effect with respect thereto
under the Deferred Compensation Plan immediately prior to its termination. The
Board of Directors may, in its discretion, grant to such Outside Director the
right to convert such share units into shares of Common Stock under the Plan
on such terms and conditions as the Board of Directors may prescribe.
SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES. No Shares issued to an
Outside Director pursuant to the Plan shall be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of by the Outside Director, other
than by will or pursuant to the laws of descent and distribution, until six
months have elapsed from the effective date of issuance of such Shares. The
Company shall hold the certificates representing such Shares for the Outside
Director's benefit until such time as the restrictions on transfer of such
Shares set forth in the preceding sentence have lapsed. All securities
received by an Outside Director on account of his Shares as a result of an
event described in Section 7(e)(i) or (ii) hereof shall be deemed to be Shares
for purposes of this Section 10 and shall be restricted as to transfer
pursuant to the provisions of this Section 10 to the same extent and for the
same period as if such securities were the original Shares with respect to
which they were issued. Subject to the restrictions of this Section 10, an
Outside Director shall have all rights as a stockholder, including voting
rights and the right to receive dividends and distributions, with respect to
his Shares.
SECTION 11. FREEZE OF NON-EMPLOYEE DIRECTORS RETIREMENT PLAN. Effective as
of July 1, 1996, the Non-Employee Directors Retirement Plan of the Company
(the "Retirement Plan") shall be "frozen" such that (i) no directors of the
Company newly elected to the Board of Directors after such date shall be
entitled to participate therein, (ii) the retirement benefit under the
Retirement Plan for all Outside Directors serving on the Board of Directors as
of such date shall be fixed from and after such date as that amount which the
Outside Director would have been entitled to receive under the Retirement Plan
had he retired as a director of the Company effective as of such date
(disregarding for this purpose the Retirement Plan's years of service
eligibility requirement), and (iii) no future benefits under the Retirement
Plan shall accrue from and after July 1, 1996. The Board of Directors may, in
its discretion, provide for the discharge of the Company's obligations with
respect to such frozen retirement benefits on such terms and conditions as the
Board of Directors may prescribe, which may include the grant to Outside
Directors of the right to exchange such frozen retirement benefits for shares
of Common Stock under the Plan (which may be Shares, Restricted Shares or
Unrestricted Shares) or other securities or cash, or a combination thereof.
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SECTION 12. PLAN AMENDMENT, MODIFICATION, AND TERMINATION. The Board of
Directors may at any time suspend, terminate, amend, or modify the Plan;
provided, however, that no amendment or modification of the Plan shall become
effective without the approval of such amendment or modification by the
stockholders of the Company if the Company, on the advice of counsel,
determines that stockholder approval is necessary or desirable; and provided
further that the provisions of the Plan governing (a) the Share Awards to be
made pursuant to Section 5 hereof and the Share Awards to be made pursuant to
Section 6(c) hereof in respect of Required Share Amounts, (b) the number of
shares of Common Stock to be issued under such awards, (c) the time at which
such awards are to be made, and (d) the duration and nature of the
restrictions applicable to such awards, shall not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code of 1986, the Employee Retirement Income Security Act of 1974, or the
rules promulgated thereunder. No suspension, termination, amendment, or
modification of the Plan shall in any manner adversely affect any Share Award
theretofore made under the Plan or the rights of a Participant with respect to
amounts theretofore credited to his Deferred Compensation Account under the
Plan, without the consent of the recipient of such award or such Participant.
All Restricted Shares issued prior to any termination of the Plan that have
not theretofore vested or been forfeited shall continue to be subject to the
terms of the Plan.
SECTION 13. PLAN EFFECTIVENESS. The Plan shall be submitted for approval by
the stockholders of the Company at the 1996 annual meeting of stockholders.
The Plan shall become effective on the date of its approval by the holders of
a majority of the shares of Common Stock present, or represented, and entitled
to vote at such annual meeting. If the Plan is not so approved, the Plan shall
terminate and all actions hereunder shall be null and void.
SECTION 14. GENERAL PROVISIONS.
(a) No Continuing Right as Director. Neither the adoption or operation of
the Plan, nor the Plan itself or any document describing or relating to the
Plan, or any part hereof, shall confer upon any Outside Director any right to
continue as a director of the Company or any subsidiary of the Company.
(b) Nonalienation of Benefits. No Outside Director or Participant shall have
the right to sell, assign, transfer, or otherwise convey or encumber in whole
or in part the right to receive any award or payment under the Plan, except in
accordance with the express provisions hereof.
(c) Binding Effect. The obligations of the Company under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation, or other reorganization of the Company, or upon any
successor corporation or organization succeeding to all or substantially all
of the assets and business of the Company. The terms and conditions of the
Plan shall be binding upon each Outside Director and any other recipient of
Restricted Shares hereunder and each such person's heirs, legatees,
distributees, and legal representatives.
(d) Severability. If any provision of the Plan or any agreement hereunder is
held to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions of the Plan or such agreement, as
the case may be, but such provision shall be fully severable and the Plan or
such agreement, as the case may be, shall be construed and enforced as if the
illegal or invalid provision had never been included herein or therein.
(e) Expenses. All expenses incident to the administration, protection, or
termination of the Plan, including, but not limited to, legal and accounting
fees, shall be paid by the Company.
(f) Notices. Whenever any notice is required or permitted under the Plan or
any agreement hereunder, such notice must be in writing and personally
delivered or sent by mail. Any notice required or permitted to be delivered
hereunder or under an agreement shall be deemed to be delivered on the date on
which it is personally delivered, or on the third business day after it is
deposited in the United States mail, certified or registered, postage prepaid,
addressed to the person who is to receive it at the address that such person
has
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theretofore specified by written notice delivered in accordance herewith. The
Company or an Outside Director may change, at any time and from time to time,
by written notice to the other, the address that it or he had theretofore
specified for receiving notices. Until such address is changed in accordance
herewith, notices hereunder or under an agreement shall be delivered or sent
(i) to the Outside Director at his address as set forth in the records of the
Company or (ii) to the Company or the Compensation Committee at the principal
executive offices of the Company clearly marked "Attention: President".
(g) No Restriction of Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company or any subsidiary thereof from taking any
corporate action that is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Share Award made or to be made under the
Plan. No Outside Director or other person shall have any claim against the
Company or any subsidiary thereof as a result of such action.
(h) Governing Law. The provisions of the Plan, and all agreements hereunder,
shall be governed by and construed in accordance with the laws of the State of
Texas.
(i) Miscellaneous. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction of the Plan or
any provisions hereof. The use of the masculine gender shall also include
within its meaning the feminine. Wherever the context of the Plan dictates,
the use of the singular shall also include within its meaning the plural, and
vice versa.
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EXHIBIT B
ORYX ENERGY COMPANY
EXECUTIVE VARIABLE INCENTIVE PLAN ("EXECUTIVE VIP")
ARTICLE I
PURPOSE OF THE PLAN
The purpose of this Executive Variable Incentive Plan (hereinafter referred
to as the "Plan") for Oryx Energy Company is to provide incentive compensation
opportunities for certain executive employees of the Company and to provide
certain participants the option of taking all or a portion of their annual
incentive compensation awards in restricted common stock of the Company. The
Plan seeks to reinforce three significant Company values: teamwork, sharing
success, and the rewarding of individual performance. It is also designed to
assist in the attraction, motivation, and retention of superior employees and
to link employees to the Company's strategic objectives and the interests of
stockholders. Each year, Participants in the Plan will have the opportunity to
earn incentive compensation awards based upon the attainment of specific
Performance Goals established at the beginning of each Plan Year by the
Compensation Committee of the Board of Directors.
ARTICLE II
DEFINITIONS
When used in the Plan, the following terms shall have the following
meanings:
2.1Base Salary means the annualized weekly base salary in effect as of
the last pay period ending during the Plan Year as reflected in the
personnel records of the Company.
2.2Board of Directors means the Board of Directors of the Company.
2.3Common Stock means the common stock, par value $1.00 per share, of the
Company or any stock or other securities of the Company hereafter
issued or issuable in substitution or exchange for the Common Stock.
2.4Company means Oryx Energy Company.
2.5Compensation Committee means the Compensation Committee of the Board
of Directors, which will have the overall responsibility for
administering the Plan.
2.6Corporate Change: A "Corporate Change" shall be deemed to have
occurred for the purposes of Article IX hereof 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 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 Article IX hereof 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
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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 or consolidation 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. 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.
2.7Disability: For purposes of Articles III and IX hereof, the
"Disability" of a Participant shall be deemed to have occurred if, in
the good faith judgment of the Compensation Committee, the Participant
shall become unable to continue the proper performance of his or her
duties as an employee of the Company or a subsidiary thereof on a
full-time basis as a result of his or her physical or mental
incapacity.
2.8Executive Deferred Compensation Plan means the nonqualified deferred
compensation plan of the Company in which certain executive employees
of the Company may voluntarily elect to participate by deferring their
cash awards earned pursuant to the Plan as set forth in Article VIII
hereof.
2.9Fair Market Value means the average of the reported high and low sales
prices of the Common Stock (rounded up to the nearest one-eighth of a
dollar) on the date 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 New York Stock Exchange (or, if the
Common Stock is not then listed or admitted to trading on such
exchange, on the principal exchange or in such other principal market
on which the Common Stock is then listed or admitted to trading).
2.10
Just Cause means willful misconduct or dishonesty by the Participant,
conviction of the Participant for a felony or failure by the
Participant to contest prosecution for a felony, or excessive
absenteeism on the part of the Participant not related to illness.
2.11
Participant means any employee of the Company or any subsidiary
thereof who is described as eligible to participate in the Plan as set
forth in Article III hereof.
2.12
Performance Goals mean the performance goals established each year
pursuant to the Plan upon which performance will be measured.
2.13
Plan means the Executive Variable Incentive Plan of Oryx Energy
Company, effective as of January 1, 1996, as described herein.
2.14
Plan Year means the performance period of the Plan, commencing on
January 1 and ending December 31 each year, commensurate with the
Company's fiscal year.
2.15
Restricted Stock means Common Stock issued pursuant to, and with such
restrictions as are imposed by, Article IX hereof.
2.16
Retirement: For purposes of Articles III and IX hereof, the term
"Retirement" shall mean a termination of employment with the Company
or a subsidiary thereof by reason of retirement either (i) on a
voluntary basis by a Participant who is at least 60 years of age or
(ii) with the written consent of the Compensation Committee in its
sole discretion (in the case of the retirement of the Chief Executive
Officer of the Company) or with the written consent of the Chief
Executive Officer of the Company in his sole discretion (in the case
of the retirement of any other Participant). The preceding provisions
of this Section to the contrary notwithstanding, at any time prior to
one year preceding the date on which a Participant attains age 60, a
Participant may make a written irrevocable election to defer his or
her voluntary retirement age set forth in clause (i) to age 61 or such
later age the Participant may designate in such election. In addition,
any Participant who makes such an election may make a subsequent
written irrevocable election to further defer his or her voluntary
retirement
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age to any age at least one year older than the age previously
designated provided that such election must be made at least one year
prior to the attainment of the previously elected voluntary retirement
age.
2.17
Target means the level of performance that is judged to be acceptable
or standard for which 100% of the award will be paid for attainment of
that performance objective.
2.18
Target Award Level means the percentage of Base Salary that may be
earned by each Participant based upon the attainment of the Target
(100%) level of performance.
2.19
Threshold means the level of performance that is judged to be the
minimum acceptable for which some percentage, less than 100%, of the
award will be paid for attainment of that performance objective.
ARTICLE III
ELIGIBILITY
3.1Subject to the provisions of this Article III, only those employees of
the Company or a subsidiary thereof who are "officers" of the Company
as defined in Rule 16a-1(f) promulgated by the Securities and Exchange
Commission under Section 16 of the Securities Exchange Act of 1934, as
amended, are eligible to participate in this Plan and only those so
eligible who are designated by the Compensation Committee as
"Participants" in the Plan for any Plan Year will participate in the
Plan for such Plan Year.
3.2An employee must be on the regular payroll (including approved annual
vacation leave) as of December 31 of the Plan Year and have at least
26 completed weeks of active service during the Plan Year in order to
be eligible to receive an award pursuant to the Plan for such Plan
Year. Any employee who satisfies the criteria for receiving an award
pursuant to the Plan for a Plan Year but who had fewer than 52
completed weeks of active service during the Plan Year shall have his
or her award pro-rated based on his or her number of completed weeks
of active service during the Plan Year. An employee whose employment
terminates during the Plan Year for any reason other than those
reasons set forth in Section 3.4 hereof is not eligible to receive an
award pursuant to the Plan for such Plan Year.
3.3Any provision of the Plan to the contrary notwithstanding: (i) for
purposes of determining an employee's completed weeks of active
service during a Plan Year under this Article III, any period of
approved annual vacation leave, and any period of a leave of absence
(whether paid or unpaid) to which the employee is entitled pursuant to
the Family and Medical Leave Act, shall be included as active service
for such Plan Year; (ii) for purposes of determining whether an
employee is on the regular payroll as of December 31 of a Plan Year
under this Article III, an employee on a leave of absence as of
December 31 of a Plan Year (whether paid or unpaid) to which the
employee is entitled pursuant to the Family and Medical Leave Act
shall be deemed to be on the regular payroll as of such date; and
(iii) for purposes of determining whether an employee is on the
regular payroll as of December 31 of a Plan Year under this Article
III, an employee receiving benefits pursuant to the Company's Short-
Term Disability Program or Long-Term Disability Plan shall be deemed
to be on the regular payroll as of such date if such employee had at
least 26 completed weeks of active service during the Plan Year.
3.4Any Participant whose employment terminates during a Plan Year (but
prior to December 31 of such Plan Year) due to Disability, Retirement
or death shall be eligible for a pro rata award for the Plan Year
based on the number of his or her completed weeks of active service
during the Plan Year, provided such Participant has accumulated at
least 26 completed weeks of active service in the Plan Year. In the
event of an employee's death, the designated beneficiary of the
employee under the Plan shall be the same as his or her designated
beneficiary under the Company's Death Benefit Plan.
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ARTICLE IV
ADMINISTRATION OF THE PLAN
4.1The Plan shall be administered by the Compensation Committee. Subject
to the express provisions of the Plan, the Compensation Committee
shall have the right and authority, in its sole and absolute
discretion, (a) to adopt, amend, or rescind administrative and
interpretive rules and regulations relating to the Plan; (b) to
construe the Plan; (c) to make all other determinations necessary or
advisable for administering the Plan; (d) to determine the terms and
provisions of the respective agreements (which need not be identical)
relating to the award of shares of Restricted Stock pursuant to
Article IX hereof; (e) to construe such agreements; and (f) to
exercise the powers conferred on the Compensation Committee under the
Plan. The Compensation Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan 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. The
determinations of the Compensation Committee on the matters referred
to in this Section 4.1 shall be final and conclusive.
4.2Subject to the express provisions of the Plan, the Compensation
Committee shall have the exclusive authority to amend, modify,
suspend, or terminate the Plan at any time; provided, however, that no
amendment, modification, suspension or termination of the Plan shall
in any manner adversely affect the right of any Participant to receive
any amount to which such Participant has become entitled prior to such
amendment, modification, suspension or termination.
4.3At the beginning of the Plan Year, the Chief Executive Officer of the
Company shall make recommendations to the Compensation Committee
regarding Performance Goals and the respective Threshold and Target
levels of performance associated with each. Within the first 90 days
of the Plan Year the Compensation Committee will review the
recommendations of the Chief Executive Officer and approve or modify
the recommendations as presented. In addition, as provided in more
detail in Articles V and VI hereof, at the completion of the Plan
Year, the Compensation Committee shall review and certify the Plan
award levels based upon actual performance during the Plan Year, and
may exercise discretion in approving the award for any Participant
such that the Compensation Committee may reduce (but may not increase)
any or all of a Participant's award otherwise determined in accordance
with the formula set forth in this Plan and the performance results
for such Plan Year. The Compensation Committee may, in its discretion,
design the award levels and performance goals for any Plan Year for
any individual or group of individuals in a manner which will except
any compensation paid to any such individual or group from the
deduction limitations of Section 162(m) of the Internal Revenue Code
of 1986, but the Compensation Committee is not obligated to do so.
ARTICLE V
TARGET AWARD LEVELS
5.1Participants in the Plan shall have Target Award Levels expressed as a
percentage, not to exceed 100%, of their respective Base Salaries
during the Plan Year. The Target Award Levels for a Plan Year will be
established for each Participant by the Compensation Committee within
the first 90 days of the Plan Year.
ARTICLE VI
DETERMINATION OF PERFORMANCE GOALS AND AMOUNT OF AWARDS
6.1
Within the first 90 days of each Plan Year, the Compensation Committee
shall establish the Performance Goals which shall provide the basis
for calculating the annual incentive compensation
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award for Participants for such Plan Year. The Performance Goals
established by the Compensation Committee for a Plan Year may be based
on stock price, cash flows, net income, operating income, expense
levels, debt balance, debt ratings, total shareholder return, return
on investment, return on equity, economic value added, production
volumes, reserve additions, profit or cost per equivalent barrel,
earnings per share, net asset value per share, or such other goals as
the Compensation Committee may determine appropriate for a Plan Year.
The Performance Goals may be based on the performance of the Company
generally, in the absolute or in relation to its peers, or the
performance of a particular employee, division, department, branch,
subsidiary or other unit to which a particular employee is assigned.
In establishing the Performance Goals for the applicable Plan Year,
the Compensation Committee may establish different Performance Goals
for individual Participants or groups of Participants. Each
Performance Goal will be weighted to reflect its relative performance
to the Company's strategic business plans for the Plan Year. The sum
of the weightings of the Performance Goals at the Target level for
particular Participants or groups of Participants will equal 100% for
the Plan Year. Each Performance Goal will have stated Threshold and
Target levels of performance which will provide a range of award
possibilities.
6.2As of the end of each Plan Year, a performance score will be
determined by the Compensation Committee for each Performance Goal
wherein achievement will be based upon actual performance compared to
the Threshold and Target levels of performance. The Compensation
Committee shall certify the degree of achievement of each Performance
Goal based upon the actual performance results for the Plan Year. The
results of the Performance Goals will be summed to determine the basis
for the annual incentive compensation award for the Participant or
group of Participants to which they apply, which sum may exceed 100%.
6.3As of the end of the Plan Year, a Participant's incentive compensation
award based upon attainment of Performance Goals for the Plan Year
shall be calculated by multiplying such Participant's Base Salary by
the Participant's Target Award Level for such Plan Year. The result
shall then be multiplied by the performance score applicable to such
Participant as determined by the Compensation Committee for such Plan
Year in accordance with Section 6.2 hereof. After such amount is
determined, the Compensation Committee may, in its sole discretion,
reduce or eliminate (but may not increase) the amount of the award for
a particular Participant based upon such factors as the Compensation
Committee may determine to be relevant, including but not limited to
such Participant's individual performance, but also shall take into
consideration reliance placed on the Plan by the Participant in
rendering performance during the Plan Year. Any provision of this Plan
to the contrary notwithstanding, the maximum incentive compensation
award based upon attainment of Performance Goals that may be payable
to any Participant for a Plan Year calculated as described above shall
be 200% of his or her annualized weekly base salary in effect as of
the first pay period ending during the Plan Year to which the award
relates.
6.4In addition to the incentive compensation awards based upon attainment
of Performance Goals as set forth above, the Compensation Committee
may, in its sole discretion, grant ad hoc incentive compensation
awards to any Participant or group of Participants in such amount or
amounts as it shall determine to be appropriate based upon such
factors as it shall deem to be relevant. Any such ad hoc incentive
compensation awards shall be determined and granted by the
Compensation Committee after the Plan Year to which the award relates
but prior to April 30 following the end of such Plan Year.
ARTICLE VII
FORM AND TIMING OF AWARDS
7.1
Incentive compensation awards under the Plan may be paid in cash or
shares of Common Stock, or in any combination thereof, at the
discretion of the Compensation Committee. Awards so paid in
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Common Stock shall be valued based on the Fair Market Value of the
Common Stock as of the first business day following the completion of
the Plan Year. The manner of payment will be at the discretion of the
Compensation Committee. Awards shall be paid by April 30 following the
completion of the Plan Year. Awards shall be subject to the normal
rules and regulations regarding the withholding for taxes and other
deductions, if any, as may be in effect from time to time.
7.2Certain Participants may elect to have their cash incentive
compensation awards earned under the Plan (a) deferred in accordance
with the provisions of Article VIII hereof or (b) paid to them in
shares of Restricted Stock in accordance with the provisions of
Article IX hereof.
ARTICLE VIII
VOLUNTARY ELECTION TO DEFER
8.1Participants eligible to participate in the Executive Deferred
Compensation Plan may elect to defer their cash incentive compensation
awards pursuant to the Plan by their voluntary election to participate
in the Executive Deferred Compensation Plan. Based upon the terms and
provisions of the Executive Deferred Compensation Plan, certain
Participants may irrevocably elect to defer the receipt of all or a
portion of their earned cash incentive compensation awards to a
specified future date such as retirement. The election to participate
in the Executive Deferred Compensation Plan must be made in writing
and submitted to the Company's Human Resources Department before the
commencement of the Plan Year.
ARTICLE IX
VOLUNTARY ELECTION TO RECEIVE RESTRICTED STOCK
9.1Subject to the provisions of this Article IX, eligible Participants
may elect to have their cash incentive compensation awards earned
under the Plan for any Plan Year paid to them in shares of Restricted
Stock. An election made by an eligible Participant pursuant to this
Article IX (a) may be made only as to increments of 25%, 50%, 75%, or
100% of the Participant's cash incentive compensation award, (b) must
be made in writing on a form approved for this purpose by the
Compensation Committee and submitted to the Company's Human Resources
Department on or before March 1 of the Plan Year in respect of which
the award is earned (or on or before such later date as the
Compensation Committee may approve), and (c) shall be irrevocable. The
elections provided for under this Article IX are hereinafter referred
to as "Restricted Stock Elections". The payment of shares of
Restricted Stock pursuant to this Article IX shall be subject to the
approval of the Compensation Committee, which shall have the
discretion to cause the Company to settle all or any part of the
Company's payment obligation under a Restricted Stock Election by the
payment to the Participant of his or her cash incentive compensation
award in lieu of the shares of Restricted Stock the Company would
otherwise be obligated to deliver.
9.2Prior to February 15 of each Plan Year, the Compensation Committee
shall designate the Participants or class or classes of Participants
(if any) who shall be eligible to make Restricted Stock Elections with
respect to awards earned under the Plan for such Plan Year. Such
determinations shall be in the sole discretion of the Compensation
Committee. A Participant who has made a Restricted Stock Election
shall be eligible to receive shares of Restricted Stock pursuant
thereto only if such Participant is an employee of the Company or a
subsidiary thereof on the date that such shares are issued. If the
Participant is not so employed, then the Participant's prior election
to receive shares of Restricted Stock in lieu of all or part of his or
her cash incentive compensation award for such Plan Year shall be
void.
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9.3The total number of shares of Restricted Stock to be paid to a
Participant who has made a Restricted Stock Election shall be
determined by dividing
(x) the product obtained (the "Subject Amount") by multiplying (i)
the amount of the Participant's cash incentive compensation
award earned under the Plan for the Plan Year times (ii) the
percentage of such amount that the Participant elected to have
paid in shares of Restricted Stock pursuant to his or her
Restricted Stock Election,
by
(y) the Fair Market Value of the Common Stock as of the first
business day following the completion of the Plan Year.
In determining the number of shares of Restricted Stock to be paid to
a Participant, the Compensation Committee may, in its discretion,
increase the value of such Participant's Subject Amount by multiplying
it by a factor, which shall not be greater than 150%, as determined by
the Compensation Committee. The factor shall be established by the
Compensation Committee prior to February 15 of the Plan Year and shall
be that rate which the Compensation Committee, in its sole discretion,
determines to be appropriate for such Plan Year to reflect the
Participant's election to forego cash compensation in exchange for
shares of Restricted Stock. No fractional shares of Common Stock shall
be issued pursuant to this Section 9.3; instead, the Company shall pay
to the Participant the amount of his or her cash incentive
compensation award not converted into whole shares of Restricted Stock
pursuant to this Section 9.3.
9.4All shares of Restricted Stock issued to Participants pursuant to this
Article IX with respect to a Plan Year shall be subject to a
restricted period (the "Restricted Period"), the duration of which
shall be determined by the Compensation Committee in its sole
discretion prior to February 15 of such Plan Year. The Restricted
Period for shares of Restricted Stock issued to a Participant shall
commence on the first business day following completion of the Plan
Year. Shares of Restricted Stock issued to a Participant pursuant to
this Article IX shall be forfeited to the Company at no cost to the
Company if the Participant's employment with the Company or a
subsidiary of the Company terminates prior to the expiration or
termination of the Restricted Period applicable to such shares;
provided, however, that the shares of Restricted Stock shall become
fully vested and the Restricted Period shall terminate upon (a) the
Participant's termination of employment during the Restricted Period
due to death, Disability, or Retirement, (b) the involuntary
termination of the Participant's employment with the Company and its
subsidiaries by action of the Company (or its subsidiary, with respect
to a Participant employed by a subsidiary of the Company) during the
Restricted Period for reasons other than Just Cause, or (c) the
occurrence of a Corporate Change during the Restricted Period. Unless
and until shares of Restricted Stock are delivered to the Participant
upon vesting, the shares of Restricted Stock shall not be sold,
assigned, transferred, discounted, exchanged, pledged, or otherwise
encumbered or disposed of by the Participant in any manner. The
Compensation Committee may from time to time, in its discretion, and
subject to such terms and conditions as the Compensation Committee may
prescribe, grant to Participants to whom shares of Restricted Stock
have been issued pursuant to this Article IX the right to extend the
Restricted Period applicable to such shares for an additional period
of time or until the occurrence of a specified event or events, in
which case such shares shall remain subject to the restrictions of
this Article IX for the period of such extension.
9.5The Company shall issue, in the name of each Participant to whom
shares of Restricted Stock have become payable pursuant to this
Article IX (or, at the option of the Company, in the name of a nominee
of the Company), stock certificates representing the total number of
shares of Restricted Stock to be paid to the Participant with respect
to a Plan Year, as soon as reasonably practicable after the date on
which the Compensation Committee approves, certifies and announces the
awards for such Plan Year. The Company or its agent, at the direction
of the Compensation Committee,
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shall hold such certificates, together with stock powers and any other
instrument of transfer reasonably requested by the Company duly
endorsed in blank, for the Participant's benefit until such time as
the shares of Restricted Stock represented by such certificates are
forfeited to the Company or the restrictions thereon terminate.
9.6Upon the issuance of a certificate representing shares of Restricted
Stock to a Participant, the Participant shall become the owner thereof
for all purposes and shall have all rights as a stockholder, including
voting rights and the right to receive dividends and distributions,
with respect to such shares, subject to the provisions of this Article
IX. If the Company shall pay or declare a dividend or make a
distribution of any kind, whether due to a reorganization,
recapitalization, or otherwise, with respect to the shares of Common
Stock constituting the shares of Restricted Stock, then the Company
shall pay or make such dividend or other distribution with respect to
the shares of Restricted Stock; provided, however, that the cash,
stock or other securities and other property constituting such
dividend or other distribution shall be held by the Company subject to
the restrictions applicable to the shares of Restricted Stock until
the shares with respect to which such dividend or other distribution
was paid or made are either vested or forfeited. If any shares of
Restricted Stock with respect to which such dividend or distribution
was paid or made do not vest but instead are forfeited pursuant to the
provisions hereof, then the Participant shall not be entitled to
receive such dividend or distribution with respect to such forfeited
shares and such dividend or distribution with respect to such
forfeited shares shall likewise be forfeited and automatically
transferred to and reacquired by the Company. If any shares of
Restricted Stock with respect to which such dividend or distribution
was paid or made become vested pursuant to the provisions hereof, then
the Participant shall be entitled to receive such dividend or
distribution with respect to such vested shares, without interest, and
such dividend or distribution with respect to such vested shares shall
likewise be delivered to the Participant.
9.7If any of the following events shall occur at any time while shares of
Restricted Stock are outstanding and prior to the vesting or
forfeiture thereof, the following adjustments shall be made in the
number of shares of Common Stock then constituting such shares of
Restricted Stock, as appropriate:
(a) If the Company pays a dividend on its outstanding shares of
Common Stock in shares of Common Stock or subdivides its
outstanding shares of Common Stock into a greater number of
shares of Common Stock, the number of shares of Common Stock
then constituting the shares of Restricted Stock shall be
proportionately increased. Conversely, if the outstanding
shares of Common Stock are combined into a smaller number of
shares of Common Stock, the number of shares of Common Stock
then constituting the shares of Restricted Stock shall be
proportionately reduced. An adjustment made pursuant to this
Section 9.7(a) shall become effective as of the record date in
the case of a dividend and shall become effective immediately
after the effective date in the case of a subdivision or
combination.
(b) In case of any recapitalization or reclassification of the
Common Stock, or any merger or consolidation of the Company
with or into one or more other corporations, or any sale of
all or substantially all the assets of the Company, as a
result of which the holders of Common Stock receive other
stock, securities, or property in lieu of or in addition to,
but on account of, their shares of Common Stock, (A) such
other stock, securities, or property allocable (as provided in
clause (B) below) to the shares of Common Stock then
constituting the shares of Restricted Stock shall be paid and
delivered with respect to such shares of Restricted Stock,
subject to the same restrictions applicable to such Restricted
Stock, and (B) the Company shall make or cause to be made
lawful and adequate provision whereby, upon the vesting of the
shares of Restricted Stock after the record date for the
determination of the holders of Common Stock entitled to
receive such other stock,
B-8
<PAGE>
securities, or property, the Participant shall receive, in lieu
of or in addition to the shares of Restricted Stock that have
vested, as the case may be, the shares of stock, securities, or
property that would have been allocable to such shares of
Restricted Stock had such shares vested immediately prior to
such record date. The subdivision or combination of shares of
Common Stock at any time outstanding into a greater or smaller
number of shares of Common Stock shall not be deemed to be a
recapitalization or reclassification of the Common Stock for
the purposes of this Section 9.7(b).
9.8
Upon the expiration or termination of the Restricted Period applicable
to shares of Restricted Stock, the restrictions applicable to the
shares of Restricted Stock that have not theretofore been forfeited
shall terminate, and as soon as practicable thereafter a stock
certificate for the number of shares of Restricted Stock with respect
to which the restrictions have terminated, together with any dividends
or other distributions with respect to such shares then being held by
the Company pursuant to the provisions of this Article IX, shall be
delivered, free of all such restrictions, to the Participant or the
Participant's beneficiary or estate, as the case may be.
9.9
Each recipient of shares of Restricted Stock pursuant to this Article
IX shall, as a condition precedent to the issuance of such shares to
or on behalf of such person, enter into an agreement with the Company,
in such form as the Compensation Committee shall prescribe and which
is consistent with the provisions of the Plan, setting forth or
incorporating the restrictions, terms, and conditions of the award of
Restricted Stock. An agreement may contain such provisions as the
Compensation Committee deems appropriate to enable the Company or its
appropriate affiliate to satisfy its federal and any applicable state
and local tax withholding obligations, including provisions permitting
the Company, upon the vesting of shares of Restricted Stock, to
withhold delivery of shares of Restricted Stock or accept delivery of
other shares of Common Stock owned by the Participant to satisfy such
tax withholding obligations. In the event of any inconsistency between
the provisions of the Plan and any such agreement, the provisions of
the Plan shall govern.
9.10
Notwithstanding anything contained in the Plan to the contrary, the
Compensation Committee shall have the right to cancel all or any
portion of any outstanding restrictions prior to the expiration or
termination of such restrictions with respect to any or all shares of
Restricted Stock on such terms and conditions as the Compensation
Committee may, in writing, deem appropriate.
ARTICLE X
NO RIGHT OF EMPLOYMENT
10.1
Nothing in the Plan, including the employee's eligibility for
participation in the Plan, will infer any right of employment by the
Company or any subsidiary thereof to such employee.
ARTICLE XI
MISCELLANEOUS
11.1
The total number of shares of Common Stock that may be issued,
transferred, or awarded pursuant to Section 7.1 or Article IX of the
Plan shall not exceed a maximum of 300,000 in the aggregate. In the
event the Company shall effect a split of the Common Stock or a
dividend payable in Common Stock, or in the event the outstanding
Common Stock shall be combined into a smaller number of shares, the
maximum number of shares that may be issued or awarded under the Plan
shall be increased or decreased proportionately. Shares that have been
previously delivered to a Participant as Restricted Stock that have
since been forfeited shall be available for further issuance or award
under the Plan. Shares of Common Stock issued pursuant to the Plan may
be shares of
B-9
<PAGE>
original issuance or treasury shares or a combination of the
foregoing, as the Compensation Committee, in its discretion, shall
from time to time determine.
11.2
Subject to the provisions of Article IX hereof, a Participant shall
not have the right to anticipate, alienate, sell, transfer, assign,
pledge, or encumber his or her right to receive any award made under
the Plan.
11.3
No Participant shall have any lien on any assets of the Company or any
subsidiary thereof by reason of any rights to any award made under the
Plan.
11.4
No member of the Compensation Committee shall be liable for any act,
omission, or determination taken or made in good faith with respect to
the Plan or any awards made hereunder; and the members of the
Compensation Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage, or
expenses (including counsel fees) arising therefrom to the full extent
permitted by law and under any directors' and officers' liability or
similar insurance coverage that may be in effect from time to time.
11.5
The adoption of the Plan or any modification or amendment hereof does
not imply any commitment to continue or adopt the same plan, or any
modification hereof, or any other plan for incentive compensation for
any succeeding year, provided that no termination, modification or
amendment of the Plan shall adversely affect the right of any
Participant to receive any amount to which such Participant has become
entitled prior to such termination, modification, or amendment.
11.6
The laws of the State of Texas shall govern the Plan.
11.7
The Plan shall be binding on the successors of the Company.
11.8
The Plan shall be deemed adopted by the Board of Directors as of
January 1, 1996. The Plan shall be deemed effective as of the date of
its adoption by the Board of Directors, provided it is duly approved
by the holders of a majority of the shares of Common Stock present, or
represented, and entitled to vote at the 1996 annual meeting of
stockholders of the Company. If the Plan is not approved by the
stockholders, the Plan shall terminate and all actions taken hereunder
shall be null and void.
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<PAGE>
ORYX ENERGY COMPANY
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ORYX ENERGY COMPANY
The undersigned hereby appoints Robert L. Keiser, William C. Lemmer and Ed-
ward W. Moneypenny, and each of them, with power to act without the other and
with power of substitution, as proxies and attorneys-in-fact and hereby autho-
rizes them to represent and vote, as provided on the other side, all the
shares of Oryx Energy Company Common Stock, which the undersigned is entitled
to vote, and in their discretion, to vote upon such other business as may
properly come before the Annual Meeting of Stockholders of the Company to be
held May 2, 1996 or any adjournment thereof, with all powers which the under-
signed would possess if present at the Meeting.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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FOLD AND DETACH HERE
<PAGE>
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This Proxy when properly executed will be voted by the Proxies in the manner
designated below. If this Proxy is returned signed but without a clear voting
designation, the Proxies will vote FOR Items 1, 2, 3 and 4 and AGAINST Items 5
and 6.
Please mark
your votes [X]
as this
Signature(s) ___________________________ Date _______________________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such
- ---
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ITEMS 1, 2, 3 AND 4
Item 1--ELECTION OF CLASS II DIRECTORS WITHHELD
Nominees: FOR FOR ALL
Robert L. Keiser [ ] [ ]
Paul R. Seegers
Ian L. White-Thomson
WITHHELD FOR:
(Write that nominee's name in the space provided below).
--------------------------------------------------------
ITEM 2--APPOINTMENT OF INDEPENDENT ACCOUNTANTS FOR AGAINST ABSTAIN
[ ] [ ] [ ]
ITEM 3--APPROVAL OF EQUITY AND DEFERRED COMPENSATION [ ] [ ] [ ]
PLAN FOR NON- EMPLOYEE DIRECTORS
ITEM 4--APPROVAL OF EXECUTIVE VARIABLE INCENTIVE PLAN [ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 5 AND 6
ITEM 5--STOCKHOLDER PROPOSAL-SHAREHOLDERS ADVISORY FOR AGAINST ABSTAIN
COMMITTEE [ ] [ ] [ ]
ITEM 6--STOCKHOLDER PROPOSAL-DECLASSIFICATION OF
BOARD [ ] [ ] [ ]
If you plan to attend the Annual Meeting, WILL ATTEND
please mark the WILL ATTEND block. [ ]
FOLD AND DETACH HERE
<PAGE>
ADMISSION TICKET
ORYX ENERGY COMPANY
1996 ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, MAY 2, 1996
9:00 A.M.
LAKEWOOD ROOM I & II
CITYPLACE CONFERENCE CENTER
2711 NORTH HASKELL
DALLAS, TEXAS
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FOLD AND DETACH HERE
