<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ORYX ENERGY COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ORYX ENERGY COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[ORYX ENERGY COMPANY LOGOS APPEAR HERE]
1998 PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
<PAGE>
[ORYX ENERGY COMPANY ORYX ENERGY COMPANY
LOGOS APPEAR HERE] 13155 NOEL ROAD
DALLAS, TEXAS 75240-5067
MARCH 23, 1998
NOTICE OF ANNUAL MEETING
TIME 3:00 p.m., on Thursday, May 7, 1998
The Hollerith Room, Suite 7001
PLACE Infomart
1950 Stemmons Freeway
Dallas, Texas 75207-3199
ITEMS OF BUSINESS 1. Elect three directors to Class I of the Board of
Directors
2. Ratify the appointment of independent accountants
for 1998; and
3. Transact such other business as may properly come
before the Annual Meeting
RECORD DATE Stockholders of record at the close of business on
March 10, 1998, are entitled to vote at the Annual
Meeting or any adjournment thereof.
LIST OF STOCKHOLDERS A list of stockholders will be available for
examination at the Company's office during ordinary
business hours for a period of ten days prior to the
Annual Meeting.
ANNUAL REPORT The 1997 Annual Report, which is not a part of the
proxy solicitation material, has been mailed along
with this Notice and accompanying Proxy Statement.
It is important that your shares be represented and
PROXY VOTING voted at the Annual Meeting. Stockholders of record
may appoint proxies and vote their shares in one of
three ways:
. signing, dating and mailing the enclosed proxy card
in the envelope provided,
. calling the toll-free number on the enclosed proxy
card, or
. via internet pursuant to the instructions on the
proxy card.
Stockholders whose shares are held by a bank, broker
or other financial intermediary may appoint proxies
and vote as provided by the intermediary.
Any proxy may be revoked in the manner described in
the accompanying Proxy Statement at any time prior to
its exercise at the meeting.
By Order of the Board of Directors,
/S/ WILLIAM C. LEMMER
William C. Lemmer
Vice President, General Counsel and
Secretary
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
GENERAL INFORMATION FOR STOCKHOLDERS 3
Voting Securities 3
Attendance at the Meeting 3
Voting Procedures 3
Confidential Voting Policy 4
Methods of Counting Votes and Votes Required 4
Revoking a Proxy 4
PROPOSALS TO BE VOTED ON 4
Election of Directors 4
Item Number 1 on Proxy Card 4
Ratification of the Appointment of Independent Accountants 5
Item Number 2 on Proxy Card 5
INFORMATION CONCERNING THE BOARD OF DIRECTORS 5
The Role of the Board 5
Board and Committee Meeting Attendance 5
Board Committees 6
Stock Ownership Guidelines for Directors 6
Corporate Governance 7
Directors' Compensation 7
The Nominees and Continuing Directors 8
SECURITY OWNERSHIP OF MANAGEMENT 11
EXECUTIVE COMPENSATION 12
Compensation Committee Report On Executive Compensation 12
Performance Graphs 16
Summary Compensation Table 19
Option/SAR Grants In 1997 Table 21
Aggregated Option/SAR Exercises In 1997 and 12/31/97 Option/SAR Value
Table 22
Pension Plans Table 22
Severance Plans and Arrangements 23
OTHER BUSINESS 23
OTHER INFORMATION 24
Security Ownership of Certain Beneficial Owners 24
Section 16(a) Beneficial Ownership Reporting Compliance 24
Stockholder Nominations and Proposals for the 1999 Annual Meeting 25
SOLICITATION OF PROXIES 26
</TABLE>
2
<PAGE>
ORYX ENERGY COMPANY
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 1998
This Proxy Statement and the accompanying proxy/voting instruction card (the
"proxy card") are being furnished to stockholders of Oryx Energy Company
("Company") by the Company's Board of Directors ("Board") in connection with
its solicitation of proxies to be used at the 1998 Annual Meeting of
Stockholders, scheduled to be held on May 7, 1998, or any adjournments thereof
("Meeting"). The approximate date of mailing of this Proxy Statement and the
accompanying proxy card is March 23, 1998.
GENERAL INFORMATION FOR STOCKHOLDERS ---------------------------
VOTING SECURITIES
The Company's only outstanding voting security is its common stock ("Common
Stock"). The Board has fixed the close of business on March 10, 1998 as the
record date for identifying stockholders entitled to vote at the Meeting and,
at that time, there were 106,113,149 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.
ATTENDANCE AT THE MEETING
Admission to the Annual Meeting will be by ticket only. If you are a
recordholder of Common Stock, you will find an admission ticket enclosed. If
you are a beneficial owner of Common Stock held indirectly through a bank,
broker or other financial intermediary (i.e. held in "street name") and you
wish to attend the Annual Meeting, you may obtain an admission ticket at the
check-in tables at the Meeting by presenting evidence of ownership of Common
Stock as of the record date.
VOTING PROCEDURES
The accompanying proxy card allows record holders to appoint proxies and
vote, and participants in the Oryx Energy Company Capital Accumulation Plan
("CAP") to give voting instructions to the CAP trustees. The proxy card also
contains instructions on how to appoint proxies and vote by telephone or by
internet. Shares of Common Stock will be voted as specified by a properly
signed and returned proxy card or by a telephonic or electronic communication
made in accordance with the proxy card instructions.
If a properly signed and returned proxy card or a properly executed
communication does not specify how the shares are to be voted with respect to
any of the items to be voted on ("Item"), shares, other than those held in
CAP, will be voted as recommended by the Board with respect to that Item, and
shares held in CAP will be voted, in accordance with the terms of CAP, by the
CAP trustee 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.
3
<PAGE>
CONFIDENTIAL VOTING POLICY
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 (which may include written comment on
proxy cards), 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 determine 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.
METHOD OF COUNTING VOTES AND VOTES REQUIRED
Stockholders who return properly signed proxy cards, or who otherwise
authorize a proxy to vote in accordance with the instructions on the proxy
card, 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 any Item before the
Meeting other than election of directors. Any stockholder who does not desire
to vote on any Item may abstain from voting by marking the appropriate space
on the proxy card or by following the instructions. However, shares voted as
abstaining and shares with respect to which there are broker non-votes will be
counted as present for both the purpose of establishing a quorum and the
purpose of determining the number of votes needed for approval of any Item
before the Meeting other than the election of directors.
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.
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 respect to the ratification of the appointment of independent
accountants, under Delaware law and the Company's Bylaws, approval requires
the affirmative vote of a majority of the shares present in person or
represented by proxy at the Meeting. Abstentions on this Item will have the
effect of a negative vote since it requires 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. These items
include the election of directors and the ratification of the appointment of
independent accountants.
REVOKING A PROXY
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.
PROPOSALS TO BE VOTED ON ----------------------------------------------
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 term of the Class I directors expire at
4
<PAGE>
the Meeting. The four current Class I directors are: David C. Genever-Watling,
Robert B. Gill, David S. Hollingsworth, who is retiring at the expiration of
his current term, and Charles H. Pistor, Jr.
The Board has nominated Mr. Genever-Watling, Mr. Gill and Mr. Pistor for re-
election as Class I directors and has reduced the number of Class I directors
to three. The terms of these Class I directors, if elected, will expire on the
date of the Annual Meeting of Stockholders in 2001, or at such time as their
successors are elected and qualified.
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.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE NOMINEES.
RATIFICATION OF THE APPOINTMENT 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. 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 1998, subject to the ratification
of such approval by the stockholders.
At the Meeting, a vote will be taken on a proposal to ratify the
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 ratification. In the event a
majority of the shares of Common Stock present in person or represented by
proxy voted at the Meeting is not voted in favor of the ratification of the
appointment 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
and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS APPOINTMENT.
INFORMATION CONCERNING THE BOARD OF DIRECTORS ---------------
THE ROLE OF THE BOARD
The business and affairs of the Company are governed in accordance with the
provisions of the Delaware General Corporation Law and the Company's
Certificate of Incorporation and Bylaws, and are managed under the direction
of the Board. The directors are informed of the Company's business and affairs
through Board and Board Committee meetings, background and informational
presentations held in conjunction with Board meetings, materials provided them
on a regular basis, meetings with officers and employees of the Company, and
outside advisors.
BOARD AND COMMITTEE MEETING ATTENDANCE
During 1997 the Board held eight meetings and the committees, described
below, held a total of 13 meetings. Average attendance for all such meetings
was 99 percent.
5
<PAGE>
BOARD COMMITTEES
There are five permanent committees of the Board. Membership of the
committees is as follows:
<TABLE>
<CAPTION>
BOARD POLICY &
AUDIT NOMINATING COMPENSATION EXECUTIVE MLP
----- ----------------------- ------------------------ ---------------------- ----------------
<S> <C> <C> <C> <C>
Paul R. Seegers* Charles H. Pistor, Jr.* Robert B. Gill* Robert L. Keiser* Robert L. Keiser
William E. Bradford William E. Bradford David C. Genever-Watling Jerry W. Box Jerry W. Box
Sylvia A. Earle Sylvia A. Earle David S. Hollingsworth William E. Bradford E.W. Moneypenny
Robert B. Gill David S. Hollingsworth Charles H. Pistor, Jr. E.W. Moneypenny
Ian L. White-Thomson Paul R. Seegers Ian L. White-Thomson Charles H. Pistor, Jr.
</TABLE>
* Chair
AUDIT COMMITTEE. The Committee is composed entirely of independent
directors. An "independent director", for the purposes of this Proxy
Statement, means a director who is not a present or former employee of the
Company and who has no meaningful financial or personal tie to the Company or
its management other than share ownership or his or her position as a
director. The Committee monitors the adequacy and effectiveness of the
Company's accounting processes, financial controls, reporting systems and
compliance program. The Committee recommends the selection of independent
accountants to the Board and approves audit fees and the scope and timing of
the audit, and reviews non-audit services. The Committee meets with the
independent accountants to review the results of the year-end audit and the
adequacy of the Company's financial and auditing personnel and resources. The
Committee reviews the Company's internal controls, internal audit plans and
significant findings. The Committee also reviews the Company's public filings,
significant changes in accounting principles, legal compliance policies and
programs, derivative and hedging program, and the insurance program and
coverages. During 1997 the Committee held three meetings.
BOARD POLICY AND NOMINATING COMMITTEE. The Committee is composed entirely of
independent directors and is responsible for corporate governance processes
and Board practices. It reviews and makes recommendations to the Board on the
role, size and structure of the Board and its committees and on the selection
of committee members and committee chair. The Committee establishes standards
for nominees for election and recommends nominees for election to the Board.
The Committee annually conducts a formal review of Board performance and
initiates and manages the formal review by outside directors of the
performance of the Chief Executive Officer. The Committee is also responsible
for overseeing succession planning for the executive officers of the Company.
During 1997 the Committee held three meetings.
COMPENSATION COMMITTEE. The Committee is composed entirely of independent
directors and supervises and administers the compensation and benefit
policies, practices and plans of the Company. It administers the Company's
executive compensation plans and employee benefit plans including the
Executive Variable Incentive Plan, Variable Incentive Plan, the long-term
incentive and retirement plans. The Committee makes recommendations to the
outside directors of the Board regarding the compensation of the executive
officers and determines the amount of the annual incentive bonuses and number
and terms and conditions of the stock incentive awards of the executive
officers of the Company. During 1997 the Committee held three meetings.
EXECUTIVE COMMITTEE. This Committee exercises the authority of the Board
during the internal meetings of the Board. During 1997 it held no meetings.
MLP COMMITTEE. This Committee determines, within the parameters established
by the Board, the frequency and amount of funding of Sun Energy Partners,
L.P., and determines the frequency and amount of funding of cash distributions
to be made by Sun Energy Partners, L.P., and the record date of such
distribution. During 1997 the Committee held four meetings.
STOCK OWNERSHIP GUIDELINES FOR DIRECTORS
The Company established stock ownership guidelines for its outside directors
in 1995. These voluntary guidelines were established to further enhance the
"stakeholder" interest of the directors in
6
<PAGE>
the Company and thus more closely align their interests with those of
stockholders. Under the guidelines, outside directors are expected to hold
Common Stock having an aggregate market value equal to at least three times
their annual retainer. Each of the outside directors has holdings exceeding the
guideline amount.
CORPORATE GOVERNANCE
The Board endorses the concept that good governance practices are an
essential element of success for the Company. The Board has adopted and adheres
to a set of written principles and practices which are substantially similar to
the General Motors Corporate Governance Guidelines and corporate governance
statements issued by institutional investors. These corporate governance
policies and practices include:
. Annual review and approval by the Board of the Company's strategic
plan
. Regular executive sessions of the independent directors
. Annual formal evaluation by the Board of its procedures,
preparedness, knowledge, structure and effectiveness
. Annual one-on-one meetings between the individual directors and the
Chief Executive Officer
. Annual formal performance review of the Chief Executive Officer by
the independent directors in executive session
. Audit, Compensation, and Board Policy and Nominating Committees
composed solely of independent directors
. Screening and recommendation of potential new Board members made by
the Board Policy and Nominating Committee
. Stock ownership guidelines for directors and executive officers
. Directors may not stand for reelection after their 70th birthday
DIRECTORS' COMPENSATION
The following table displays components of outside director compensation.
Employee directors receive no compensation for serving on the Board or its
Committees.
<TABLE>
<CAPTION>
COMPENSATION AMOUNT/NUMBER(1)
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<S> <C>
Annual Board Retainer...................................... $24,000(2)
Annual Stock Grant......................................... 500 shares(3)
Annual Retainer for Committee/Chair Assignment............. $2,500/4,000(4)
Board, Committee or Management Meeting Fee................. $1,000(4)
Triennial Option Grant..................................... 9,000 options(5)
</TABLE>
(1) Beginning with the upcoming Board year (May 1998 through April 1999),
directors may elect to receive Common Stock in the form of restricted
stock, in which case the number of shares received will be increased by 30
percent to reflect present value considerations.
(2) One-half of the annual retainer is paid in Common Stock. Directors may
elect to receive the balance in Common Stock or cash.
(3) Each person who is an outside director on the date of and immediately
following an annual meeting of stockholders receives an annual grant of 500
shares of Common Stock. Each newly-elected director receives a one-time
grant of 5,000 shares of Common Stock upon his or her election.
(4) Directors may elect to receive Committee retainers and meeting fees in
Common Stock or cash.
(5) Options are granted at the fair market price of Common Stock on the date of
grant. In 1997 each outside director was awarded 4,500 options and
thereafter each director will be awarded 9,000 options upon election for a
three-year term. Directors newly-elected other than at an annual meeting of
stockholders will receive a prorated grant of options upon election. The
options vest at the end of the term of office for which they are granted.
The Company provides no pension or medical benefits to outside directors.
7
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THE NOMINEES AND CONTINUING DIRECTORS
The nominees for director and all continuing directors are described below,
in order of their classification.
CLASS I -- TERM EXPIRES 2001 (IF ELECTED)
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DAVID C. GENEVER-WATLING (Director since 1996). Managing
[PHOTO] Director of SMG Management L.L.C., an investment firm, since
1997. Age 52. From 1992 until his retirement in 1995, he was
President and Chief Executive Officer and from 1990 to 1992 he
was Senior Vice President of General Electric Industrial and
Power Systems. Prior to that he served as Vice President and
General Manager of GE Power Generation and before that as Vice
President and General Manager of GE Motors. Mr. Genever-
Watling also served at GE's Corporate Offices as Vice
President and Deputy to the Vice Chairman and as General
Manager of Military Engines and Product Support.
- -------------------------------------------------------------------------------
ROBERT B. GILL (Director since 1989) Vice Chairman of the
Board of J. C. Penney Company, Inc. from 1982 and Chief
[PHOTO] Operating Officer of J. C. Penney Stores and Catalog from 1990
until his retirement in 1992. Age 66. Prior to his retirement
from J. C. Penney, Mr. Gill served as 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. Mr. Gill is a member of the Business Advisory
Committee at Lehigh University.
- -------------------------------------------------------------------------------
CHARLES H. PISTOR, JR. (Director since 1988) Former Vice Chair
[PHOTO] of Southern Methodist University from 1991 to 1995. Age 67.
Mr. Pistor was Chairman of the Board and Chief Executive
Officer of NorthPark National Bank from 1988 to 1990. He has
also been Vice Chairman of First RepublicBank Corporation, and
Chairman and Chief Executive Officer of First 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, Centex Corporation, Fortune Brands, Inc., and
Zale Corporation. Mr. Pistor is a member of the Executive
Board of the Cox School of Business at Southern Methodist
University.
8
<PAGE>
CLASS II--TERM EXPIRES 1999
- -------------------------------------------------------------------------------
ROBERT L. KEISER (Director since 1991) Chairman of the Board
[PHOTO] and Chief Executive Officer since December 1, 1994. Age 55.
Mr. Keiser was President as well as Chairman and Chief
Executive Officer from 1994 to 1998 and was President and
Chief Operating Officer from 1992 through 1994. He was
President and Chief Executive Officer of Oryx U.K. Energy
Company and was Vice President, International Exploration and
Production of the Company from 1990 through 1991. Mr. Keiser
is a member of the Board of Advisors of the Maguire Oil and
Gas Institute at Southern Methodist University, a director and
past chairman of the Domestic Petroleum Council, and a
director of the University of Texas at Dallas.
- -------------------------------------------------------------------------------
PAUL R. SEEGERS (Director since 1990) President of Seegers
[PHOTO] Enterprises. Age 68. Chairman of the Board of Centex
Corporation from 1988 until his retirement in 1991. From 1985
to 1988, he was also its Chief Executive Officer, and from
1978 to 1985 its Vice Chairman and Co-Chief Executive Officer.
Mr. Seegers is a member of the board of directors of Centex
Corporation and Chairman of its Executive Committee and is a
member of the board of directors and chair of the Audit
Committee of FIRSTPLUS Financial Group, Inc.
- -------------------------------------------------------------------------------
IAN L. WHITE-THOMSON (Director since 1993) Chairman since
[PHOTO] 1996, President and Chief Executive Officer since 1988, and
director since 1973 of U.S. Borax Inc., and Chief Executive
Officer of Rio Tinto Borax Limited since 1995. Age 61. From
1986 to 1988 Mr. White-Thomson was Vice President, Marketing
and then Executive Vice President of U.S. Borax. Mr. White-
Thomson is a director of the National Mining Association and
chair of its Finance Committee since 1997. He was selected as
Manufacturer of the Year in 1997 by the California
Manufacturers' Association. Mr. White-Thomson is a director of
KCET Community Television of Southern California.
9
<PAGE>
CLASS III TERM EXPIRES 2000
- -------------------------------------------------------------------------------
JERRY W. BOX (Director since 1994) President and Chief
[PHOTO] Operating Officer since February 1998. Age 59. Mr. Box was
Executive Vice President and Chief Operating Officer from 1995
to 1998 and the Executive Vice President, Exploration and
Production from 1994 to 1995. From 1992 to 1994, he was Senior
Vice President, Exploration and Production, and was Vice
President, Exploration. Mr. Box is a director of the Natural
Ocean Industries Association, and has been a member of the
Policy Committee of the United States Department of the
Interior's Outer Continental Shelf Advisory Board, chairman
and vice chairman of the American Petroleum Institute's
exploration affairs subcommittee, and president of the Dallas
Petroleum Club.
- -------------------------------------------------------------------------------
WILLIAM E. BRADFORD (Director since 1993) Chairman and Chief
[PHOTO] Executive Officer of Dresser Industries, Inc. since 1996. Age
63. Mr. Bradford served as President and Chief Executive
Officer from 1995 to 1996 and as President and Chief Operating
Officer of Dresser Industries, Inc. from 1992 to 1995. He has
been a director of Dresser Industries, Inc. since 1992. From
1988 to 1992, he was President and Chief Executive Officer of
Dresser-Rand Company and from 1982 to 1992 he was Senior Vice
President of Operations of Dresser Industries, Inc. Mr.
Bradford is a director of Ultramar/Diamond Shamrock, Inc.
- -------------------------------------------------------------------------------
SYLVIA A. EARLE (Director since 1996) Chair of Deep Ocean
[PHOTO] Exploration and Research, Inc. since 1992, and Explorer-in-
Residence for the National Geographic Society since 1998. Age
62. From 1993 to 1995, Dr. Earle was Chairman of the Sea
Change Trust and Caribbean Marine Research Center, a non-
profit scientific research organization. From 1992 to 1993,
she was an Advisor to the Administrator and from 1990 to 1992
she was Chief Scientist of the National Oceanic and
Atmospheric Administration. Dr. Earle is the founder and from
1981 to 1990 and 1992 to 1997 was a director of Deep Ocean
Engineering, Inc., a designer and manufacturer of underwater
equipment and from 1988 to 1990 was its President, Chief
Executive Officer and Chairman. Dr. Earle is also a member of
the board of directors of Dresser Industries, Inc.
- -------------------------------------------------------------------------------
[PHOTO] EDWARD W. MONEYPENNY (Director since 1994) Executive Vice
President, Finance, and Chief Financial Officer since 1994.
Age 56. Mr. Moneypenny was the Senior Vice President, Finance,
and Chief Financial Officer from 1992 to 1994 and Vice
President, Finance and Chief Financial Officer from 1988
through 1991. Mr. Moneypenny 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.
10
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
--------------------------------
The following table sets forth, as of December 31, 1997, 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 the Company's stock ownership guidelines for directors and executive
officers, see "Information Concerning the Board of Directors -- Stock
Ownership Guidelines for Directors" and "Executive Compensation --
Compensation Committee Report on Executive Compensation -- Stock Ownership
Guidelines". No director or named executive officer beneficially owns any of
the Company's 7 1/2% Convertible Subordinated Debentures Due 2014 or any
depository units of Sun Energy Partners, L.P. ("Partnership Units") for which
the Company acts as Managing General Partner other than Paul R. Seegers who
beneficially owns 30,000 Partnership Units (10,000 of which were purchased in
February, 1998). Officers other than named executive officers own 10
Partnership Units.
<TABLE>
<CAPTION>
Number of Shares That
Number of Shares May Be Acquired By
of Options Exercisable
Name Common Stock Within 60 Days (1)
- ------------------------------------------------------------------------------
<S> <C> <C>
Directors
Jerry W. Box (2)..................... 18,134 181,727
William E. Bradford.................. 17,425 --
Sylvia A. Earle...................... 5,934 --
David C. Genever-Watling............. 5,934 --
Robert B. Gill....................... 17,205 --
David S. Hollingsworth............... 23,881 --
Robert L. Keiser (2) ................ 139,101 372,684
Edward W. Moneypenny (2)............. 13,041 146,003
Charles H. Pistor, Jr................ 14,669 --
Paul R. Seegers...................... 25,011 --
Ian L. White-Thomson................. 11,202 --
Executive Officers Named in the Sum-
mary Compensation Table Other Than
Those Listed Above:
Warren A. Bryan (2).................. 13,544 62,857
William C. Lemmer (2)................ 14,050 48,350
All directors and executive officers
as a group (20 persons including
those named above) (2).............. 349,843 1,008,735
</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, 1997.
(2) Includes the following number of shares of restricted stock taken in lieu
of a portion of a cash bonus under the terms of the Company's incentive
plans, acquired effective January 2, 1998: J.W. Box -- 1,814 shares; W.A.
Bryan -- 653 shares; R.L. Keiser -- 10,390 shares; W.C. Lemmer -- 770
shares; E.W. Moneypenny -- 1,649 shares; and all executive officers of the
Company as a group -- 21,217 shares. The outside directors do not
participate in the Company's annual incentive plan and do not receive a
bonus.
11
<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. This review is conducted by the Compensation Committee of
the Board of Directors ("Committee"). The Committee is comprised of five
directors, all of whom qualify as both a "non-employee director" and an
"outside director" under applicable regulatory definitions. Operating within
the framework of a mission statement approved by the Board of Directors, the
Committee's role is to assure that: (1) the compensation strategy of the
Company is aligned with the interests of the stockholders, (2) the Company's
compensation structure allows for fair and reasonable base salary levels and
(3) 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, in 1995 the Company established voluntary stock ownership
guidelines for its executive officers at the level of Vice President and
senior. 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 annual base salary, and the President and Vice
Presidents are expected to own Common Stock having an aggregate market value
equal to at least their respective annual base salaries. These stock ownership
guidelines complement those adopted for outside 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
12
<PAGE>
companies of similar size, as measured by annual revenues. The Company
participated in two industry-specific surveys of 35 and 31 companies and
two general-industry surveys of 507 and 441 companies. The number of
participants in each survey typically varies from year to year as companies
change their focus, merge or are acquired. The results of each survey are
weighted equally.
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 used for the
performance graph of cumulative total stockholder return on page 16 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 one company, each of the companies included in
that peer group 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 subjective appraisal of the
executives' performance with respect to the goals approved by the Committee
for each individual's area of responsibility. Adjustments to base salaries
of executive officers are customarily made prior to the commencement of the
year in which such adjustments take effect, and are based on the
Committee's assessment of performance and competitive factors at that time.
Decisions regarding annual incentives, discussed below, are made at the end
of the performance period.
ANNUAL INCENTIVES: Annual incentives for executive officers, if earned,
are paid under the terms of either the Executive Variable Incentive Plan
("Executive VIP") or Variable Incentive Plan ("VIP"). The Executive VIP
provides participants with the option of taking all or a portion of their
annual incentive awards in restricted Common Stock. All of the executive
officers listed in the Summary Compensation Table participated in the
Executive VIP in 1997, except for Mr. Bryan who became an executive officer
in September 1997 and who participated in the VIP. Both the Executive VIP
and VIP are 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 Executive VIP and VIP goals and targeted performance levels for each
goal are established by the Committee at the beginning of the fiscal year
in support of the Company's annual strategic plan. Past performance levels
of the Company and conditions anticipated to exist within the oil and gas
industry during 1997 were taken into account when the goals and target
levels for 1997 were established. These goals, which included both
operational and financial measures, were as follows: discretionary cash
flow, operating income, cash expenses, production volumes 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.
Executive VIP/VIP payments based upon attainment of the performance goals
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 33
to 60 percent of annual base salary. The Committee has discretion under the
Executive VIP to reduce payment, and under the VIP to vary payments, around
targeted amounts, or to forego payments in full, based upon its subjective
evaluation of the performance of each executive officer and the Company.
In addition to payments based upon attainment of the performance goals
established by the Committee at the beginning of the fiscal year, the
Committee has discretion under the Executive VIP to grant ad hoc incentive
compensation awards to executive officers. Such discretionary payments, if
any, awarded by the Committee are based upon the factors deemed relevant by
the
13
<PAGE>
Committee at the time of the award, which would include a change in
circumstances after the establishment of performance goals for that fiscal
year.
LONG-TERM INCENTIVES: Long-term incentive awards are designed to align
the interests of executives more closely with those of stockholders. The
1992 Long-Term Incentive Plan was approved by stockholders in 1991 and
authorizes the use of a variety of stock-based forms of compensation. In
1997, 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
428 companies, over 14,000 participating individuals and 570 long-term
incentive plans. The group of 428 companies consists principally of Fortune
1000 entities which represent a broad cross-section of industries. Due to
the lack of common performance 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 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.
In 1997, stockholders approved the 1997 Long-Term Incentive Plan which
replaced the 1992 Long-Term Incentive Plan.
COMPANY PERFORMANCE AND CHAIRMAN/CEO COMPENSATION
Mr. Keiser received a base salary increase of $50,000 for 1997. The
Committee made this determination in accordance with the process discussed
above under "Base Salary" and the factors considered in making this
determination were competitive pay practices, Company performance in 1996, and
a subjective evaluation of the scope of Mr. Keiser's responsibilities.
The Chairman/CEO's annual incentive award under the Executive VIP is based
on the Committee's assessment of the Company's performance as described above
in the discussion on annual incentives. The Committee determined that the
Company's performance in 1997 in the five operational and financial goal areas
described above, in the aggregate, exceeded the target, whereas the share
price appreciation goal for 1997 was not achieved. The Committee determined
that the minimum threshold of targeted performance was exceeded and then set
Mr. Keiser's annual Executive VIP award for 1997 based on its assessment of
the criteria described above under "Annual Incentives," including the extent
to which the established performance goals were achieved and the consideration
of circumstances warranting an award of a discretionary payment.
The long-term incentive awards for 1997 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. The Committee used data from the consulting firm survey 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 1997 is fully deductible. The long-term
incentives granted by the Committee in 1997 qualify as "performance-based
compensation" under Internal Revenue Code Section 162(m). The Executive VIP is
intended to comply with the requirements of Internal Revenue Code Section
162(m) and compensation paid thereunder will qualify as performance-based
compensation for 1997. The Committee will make every effort to preserve the
tax deductibility of all executive compensation, consistent with the interests
of the Company.
14
<PAGE>
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.
Robert B. Gill, Chair
David C. Genever-Watling
David S. Hollingsworth
Charles H. Pistor, Jr.
Ian L. White-Thomson
15
<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 1997. The second graph, which
includes the peer group index selected in 1996, 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. Due to various mergers and spin-offs in 1997 within the peer group,
it has been revised to select companies that the Company currently considers
more compatible as a peer group.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)(2)
AMONG ORYX ENERGY COMPANY, S&P 500 INDEX AND PEER GROUP INDEX SELECTED IN
1997(3)
1992 1993 1994 1995 1996 1997
S&P 500 $100 $110 $112 $153 $188 $251
Peer Group $100 $121 $111 $136 $186 $153
Oryx Energy $100 $90 $62 $69 $129 $132
(1) Assumes $100 invested on January 1, 1993 at December 31, 1992 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 1997 is composed of 12 industry participants: Anadarko Petroleum
Corporation, Apache Corporation, Burlington Resources, Inc., Enron Oil &
Gas Company, Noble Affiliates, Inc., Oryx Energy Company, Pioneer Natural
Resources Company, Seagull Energy Company, Union Pacific Resources, Inc.,
Unocal Corporation, Union Texas Petroleum Holdings, Inc. and Vastar
Resources, Inc. In addition, Pioneer Natural Resources Company, Union
Pacific Resources, 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 Pioneer Natural
Resources Company, Union Pacific Resources, 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.
16
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)(2)
AMONG ORYX ENERGY COMPANY, S&P 500 INDEX AND PEER GROUP INDEX SELECTED IN
1996(3)
1992 1993 1994 1995 1996 1997
S&P 500 $100 $110 $112 $153 $188 $251
Peer Group $100 $124 $109 $137 $181 $148
Oryx Energy $100 $90 $62 $69 $129 $132
(1) Assumes $100 invested on January 1, 1993 at December 31, 1992 closing price
in Common Stock, the S&P 500 Index and a Company-selected 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 1996 was 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. In
addition, Santa Fe Energy Resources, Inc., Union Pacific Resources, 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 Santa Fe Energy Resources, Inc.,
Union Pacific Resources, 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
<PAGE>
The following graph has been voluntarily included to show total stockholder
return since January 1995 when the Company named a new Chairman/CEO and
announced its new corporate direction which included a plan to refocus its
strategic direction, reduce debt, reposition assets and restore profitability
by lowering costs at all levels. The peer group companies selected by the
Company for this graph are the same as those shown as the 1997 peer group.
COMPARISON OF THREE YEAR CUMULATIVE TOTAL RETURN(1)
AMONG ORYX ENERGY COMPANY, S&P 500 INDEX AND PEER GROUP INDEX SELECTED IN 1997
1994 1995 1996 1997
S&P 500 $100 $137 $169 $225
Peer Group $100 $119 $160 $135
Oryx Energy $100 $113 $208 $215
(1) Assumes $100 invested on January 1, 1995 at December 31, 1994 closing price
in Common Stock, the S&P 500 Index and the Company-selected peer group
index used for the performance graph shown on page 16. Total return assumes
reinvestment of dividends.
18
<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 1997 and each of the four most highly compensated executive officers of
the Company during 1997 other than the Chairman/CEO (collectively, the "named
executive officers") for the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------ -------------------------------
Awards Payouts
----------------------- -------
Securities
Underlying All
Restricted Options/SARs Other
Name and Bonus Other Annual Stock (number of LTIP Compen-
Principal Position Year Salary (1) Compensation Awards (1) shares) (2) Payouts sation
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Keiser 1997(3) $523,588 $ 66,938 $27,326 $261,049 87,700 $ 0 $38,141
Chairman and Chief 1996 $473,720(4) $135,391 $28,503 $676,447 110,000 $ 0 $39,169
Executive Officer 1995 $473,720 $ 0(5) $75,278 $370,494 78,000 $ 0 $34,004
Jerry W. Box 1997(6) $329,108 $105,188 $ 7,822 $ 45,577 40,000 $ 0 $24,787
President and Chief 1996 $300,196 $214,470 $ 9,802 $ 92,926 50,000 $ 0 $26,098
Operating Officer 1995 $272,324 $102,466 $ 9,802 $ 44,375 42,000 $ 0 $19,261
Edward W. Moneypenny 1997(7) $299,208 $ 95,625 $ 8,298 $ 41,431 30,000 $ 0 $22,774
Executive Vice 1996 $284,232 $203,077 $11,514 $ 87,979 50,000 $ 0 $24,956
President, Finance, and 1995 $264,264 $ 99,373 $10,010 $ 43,065 42,000 $ 0 $18,383
Chief Financial Officer
William C. Lemmer 1997(8) $199,472 $ 44,625 $20,543 $ 19,346 15,000 $ 0 $14,103
Vice President, General 1996 $189,488 $ 94,771 $14,333 $ 41,055 20,000 $ 0 $15,754
Counsel and Secretary 1995 $175,552 $ 46,200 $12,992 $ 20,021 11,000 $ 0 $10,570
Warren A. Bryan 1997(9) $189,534 $ 38,263 $ 2,099 $ 16,570 10,600 $ 0 $13,427
Vice President,
U.S. Onshore Operations
</TABLE>
(1) The amounts shown in the Bonus column for 1997 represent the cash amounts
awarded under the Executive VIP or VIP, the Company's bonus plans. All
named executive officers elected to receive part of their bonus for 1997
in restricted Common Stock rather than cash. The restricted Common Stock
was acquired under the terms of the Executive VIP or the 1997 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.
For all named executive officers other than Mr. Keiser, the amounts shown
in the Restricted Stock Awards column represent the market value of the
restricted Common Stock taken in lieu of their cash bonuses on the first
trading day of the following year. The amount shown for Mr. Keiser
represents the market value on the first trading day of the following year
of the restricted Common Stock taken in lieu of his cash bonus plus an
amount reflecting shares received in lieu of a cash base salary increase
in 1996 (see footnote 4 below).
(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.
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 1997 table included elsewhere herein for
additional information on option terms.
(3) The amount shown as All Other Compensation for Mr. Keiser for 1997
consists of Company contributions to defined contribution plans of $28,522
($18,353 in cash and an allocation of 398.78 shares of Common Stock valued
at $10,169 using the December 31, 1997 closing price) and term life
insurance premiums of $9,619.
(4) The Committee determined Mr. Keiser was entitled to receive a cash base
salary increase of $25,000 for 1996. Acting on the request of Mr. Keiser,
the Committee did not increase his base salary but in lieu thereof awarded
him a number of shares of restricted Common Stock based on this amount and
adjustments for the impact of the loss of future earnings resulting from
having received no base salary increase, the impact on non-cash
compensation under other Company benefit plans and present value
considerations. He received 11,000 shares on January 2, 1996 which had a
market value as of that date of $13.50 per share.
19
<PAGE>
(5) Mr. Keiser elected to receive 100 percent of his bonus for 1995 in
restricted Common Stock.
(6) The amount shown as All Other Compensation for Mr. Box for 1997 consists
of Company contributions to defined contribution plans of $19,085 ($8,861
in cash and an allocation of 400.94 shares of Common Stock valued at
$10,224 using the December 31, 1997 closing price) and term life insurance
premiums of $5,702.
(7) The amount shown as All Other Compensation for Mr. Moneypenny for 1997
consists of Company contributions to defined contribution plans of $17,590
($7,480 in cash and an allocation of 396.48 shares of Common Stock valued
at $10,110 using the December 31, 1997 closing price) and term life
insurance premiums of $5,184.
(8) The amount shown as All Other Compensation for Mr. Lemmer for 1997
consists of Company contributions to defined contribution plans of $12,951
($1,974 in cash and an allocation of 430.48 shares of Common Stock valued
at $10,977 using the December 31, 1997 closing price) and term life
insurance premiums $1,152.
(9) Mr. Bryan became an executive officer September 4, 1997. The amount shown
as All Other Compensation for 1997 consists of Company contributions to
defined contribution plans of $12,333 ($1,477 in cash and an allocation of
425.71 shares of Common Stock valued at $10,856 using the December 31,
1997 closing price) and term life insurance premiums of $1,094.
20
<PAGE>
The following table sets forth certain information with respect to options
to purchase Common Stock and Stock Appreciation Rights (SARs) granted during
the year ended December 31, 1997 to each of the named executive officers.
OPTION/SAR GRANTS IN 1997
<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 (2)
(number of Employees Base Price Expiration --------------------------------
Name shares) (1) in 1997 Per Share Date (1) 5 Percent (3) 10 Percent (4)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Keiser........ 87,700 20.7 $24.25 1/2/2007 $ 1,337,486 $ 3,389,452
Jerry W. Box............ 40,000 9.5 $24.25 1/2/2007 $ 610,028 $ 1,545,930
Edward W.
Moneypenny............. 30,000 7.1 $24.25 1/2/2007 $ 457,521 $ 1,159,448
William C. Lemmer....... 15,000 3.6 $24.25 1/2/2007 $ 228,760 $ 597,724
Warren A. Bryan......... 10,600 2.5 $24.25 1/2/2007 $ 161,657 $ 409,671
</TABLE>
(1) Options represent the right to purchase shares of Common Stock at a fixed
price per share and were granted with limited rights and have a ten-year
term. The options vest at the rate of 33.3 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 three years after such retirement or
disability. Option vesting is accelerated if the fair market value of the
Common Stock is at least $34.25 per share on each of 30 consecutive
trading days. No SAR grants were made in 1997.
(2) 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. Any
benefit to named executive officers resulting from the appreciation of the
market price of the Common Stock will benefit all stockholders of the
Company commensurately. There can be no assurance that the values shown in
this table will be achieved.
(3) Reflects an assumed market price per share of Common Stock of $39.50
calculated by multiplying the exercise price of $24.25 by the growth
assumption of 5 percent.
(4) Reflects an assumed market price per share of Common Stock of $62.90
calculated by multiplying the exercise price of $24.25 by the growth
assumption of 10 percent.
21
<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,
1997 and the unexercised options held at December 31, 1997 and the value
thereof, by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1997
AND 12/31/97 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Acquired Underlying Unexercised In-the-Money
on Exercise Options/SARs at 12/31/97 Options/SARs at
(number of Value (shares) (1) 12/31/97 (1)
Name shares) Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Keiser........ 2,568 $ 2,167 305,950 144,700 $2,563,944 $788,518
Jerry W. Box............ 13,972 $116,885 147,518 71,375 $ 686,404 $421,060
Edward W.
Moneypenny............. 62,462 $762,418 116,128 60,375 $ 362,224 $400,500
William C.
Lemmer................. 2,750 $ 38,156 39,100 22,000 $ 305,998 $106,121
Warren A. Bryan......... 0 $ 0 52,973 19,400 $ 324,008 $111,753
</TABLE>
(1) Options represent the right to purchase shares of Common Stock at a fixed
price per share.
The following table shows the estimated annual benefits payable to an
executive officer under the Company's defined benefit plans upon retirement at
age 65 after selected periods of service, assuming retirement on January 1,
1998.
PENSION PLANS TABLE
<TABLE>
<CAPTION>
Years of Service
35 or
Final Average Compensation 15 20 25 30 More
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 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
$ 900,000..................... $337,500 $405,000 $472,500 $540,000 $585,000
$1,100,000.................... $412,500 $495,000 $577,500 $660,000 $715,000
</TABLE>
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 1997 considered
compensation for the named executive officers is as follows: R.L. Keiser --
839,997; J.W. Box -- $494,991; E.W. Moneypenny -- 450,021; W.C. Lemmer --
270,012; and W.A. Bryan -- $244,861.
Credited years of service for the named executive officers are as follows:
R.L. Keiser -- 32; J.W. Box -- 29; E.W. Moneypenny -- 21; W.C. Lemmer -- 18;
and W.A. Bryan -- 27.
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. Retirement benefits shown
22
<PAGE>
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.
SEVERANCE PLANS AND ARRANGEMENTS
The Special Executive Severance Plan provides severance benefits to the
named executive officers 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, 1997, payments under the Special Executive Severance Plan
to the named executive officers would have been as follows: R.L. Keiser --
$2,519,989; J.W. Box -- $1,484,973; E.W. Moneypenny -- $1,350,061; W.C.
Lemmer -- $810,037; and W.A. Bryan -- $763,918 (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.
OTHER BUSINESS -----------------------------------------------------------
The Board does not know of any business that will properly come before the
Meeting other than that set forth in the Notice of Annual Meeting of
Stockholders. However, in the event that any other business does properly come
before the Meeting, it is the intention of the proxy holders to vote on such
business in accordance with their judgment.
23
<PAGE>
OTHER INFORMATION ------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following stockholders are the only stockholders 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, 1997:
<TABLE>
<CAPTION>
Shares of Percent of
Common Common
Name and Address Stock Stock
- --------------------------------------------------------------------------------
<S> <C> <C>
Prudential Insurance Company of America (1).............. 7,222,986 6.8
Prudential Plaza
751 Broad Street
Newark, New Jersey 70102-3777
Tiger Management L.L.C. (2).............................. 6,408,300 6.1
Tiger Performance L.L.C.
101 Park Avenue
New York, New York 10178
Neuberger & Berman, L.L.C. .............................. 5,850,346 5.5
Neuberger & Berman Management Inc. (3)
605 Third Avenue
New York, NY 10158-3698.
</TABLE>
(1) The information relating to The Prudential Insurance Company of America
("Prudential") was obtained from Schedule 13G dated February 10, 1998,
filed by that company with respect to its ownership of Company securities
as of December 31, 1997. These shares are beneficially owned by
Prudential, but are held for the benefit of its clients by its separate
accounts, externally managed accounts, registered investment companies,
subsidiaries and/or other affiliates. Prudential has voting and
disposition power of 7,015,486 shares of Common Stock, including bonds
convertible into 127,743 shares of Common Stock. Prudential's voting and
dispositive power consist of the following: 1,716,000 shares with sole and
5,227,443 shares with shared voting power, and 1,716,000 shares with sole
and 5,379,243 shares with shared dispositive power. In addition,
Prudential holds 207,500 shares of Common Stock for the benefit of its
general account.
(2) The information relating to Tiger Management L.L.C. ("TMLLC") and Tiger
Performance L.L.C. ("TPLLC") was obtained from Schedule 13 G dated
February 13, 1998, filed by TMLLC and TPLLC and by Julian H. Robertson,
Jr., the ultimate controlling person of TMLLC and TPLLC, with respect to
their ownership of Company securities as of December 31, 1997. TMLLC has
shared voting and dispositive power of, and beneficially owns 3,909,500
shares of Common Stock, and TPLLC has shared voting and disposition power
of, and beneficially owns 2,498,800 shares of Common Stock.
(3) The information relating to Neuberger & Berman, L.L.C. ("N&BLLC") and
Neuberger & Berman Management Incorporated ("N&BM") was obtained from
Schedule 13G dated February 11, 1998, filed by N&BM with respect to its
ownership of Company securities as of December 31, 1997. These shares are
beneficially owned by N&BLLC and N&BM but are held for the benefit of
their clients. N&BLLC and N&BM have shared dispositive power of 5,850,346
shares of Common Stock and shared voting power of 495,400 shares. N&BLLC
has sole voting power of 4,475,596 shares. Principal(s) of N&BLLC own
190,100 shares of Common Stock which are not included in the number of
shares beneficially owned since beneficial ownership thereof is disclaimed
by N&BLLC.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 beneficial ownership of the Common Stock and other
equity securities of the Company on Form 3 and changes in such ownership on
Forms 4 and 5.
To the Company's knowledge, all Forms 3, 4 and 5 required to be filed by
Section 16(a) of the Exchange Act during the year ended December 31, 1997,
were timely filed.
24
<PAGE>
STOCKHOLDER NOMINATIONS AND PROPOSALS FOR THE 1999 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.
(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 1999 proxy materials, the proposal
must be received by the Secretary of the Company on or before its close of
business on November 23, 1998.
25
<PAGE>
SOLICITATION OF PROXIES -------------------------------------------------
The Company has provided proxy materials to banks, brokers, and other
financial fiduciaries and requested that such materials be promptly forwarded
to the beneficial owners of Common Stock. In addition, solicitation of proxies
may be made by directors, officers or employees of the Company. ChaseMellon
Shareholder Services L.L.C. has been retained to assist in the distribution to
and solicitation of proxies from stockholders and from banks, brokers, and
other nominees for a base fee of $6,000 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,
/s/ WILLIAM C. LEMMER
William C. Lemmer
Vice President, General Counsel and
Secretary
13155 Noel Road
Dallas, Texas 75240-5067
March 23, 1998
26
<PAGE>
DIRECTIONS TO
ORYX ENERGY
ANNUAL MEETING OF STOCKHOLDERS
[MAPS APPEAR HERE]
<PAGE>
<TABLE>
<S> <C>
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 AND 2. Please mark [X]
your votes
like this
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
FOR AGAINST ABSTAIN
Item 1-ELECTION OF CLASS 1 DIRECTORS Item 2-RATIFICATION OF [_] [_] [_]
NOMINEES: THE APPOINTMENT
OF INDEPENDENT
ACCOUNTANTS
Ol David C. Genever - Watling WITHHELD
02 Robert B. Gill FOR FOR ALL
03 Charles H. Pistor, Jr. [_] [_] WILL
If you plan to attend the ATTEND
WITHHELD FOR: (Write that nominee's name in the space provided below). Annual Meeting, please mark [_]
the WILL ATTEND box
________________________________________________
]
SIGNATURE ___________________________________________________ SIGNATURE_______________________________________ DATE_____________
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
-------------------------------------------------------------------------------------------
VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE
-------------------------------------------------------------------------------------------
Your telephone or internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and
returned your proxy card.
VOTE BY PHONE: CALL TOLL FREE ON A TOUCH-TONE TELEPHONE 1-800-840-1208 ANYTIME. THERE IS NO CHARGE FOR THIS CALL.
You will be asked to enter the 11-digit Control Number located in the box in the lower right of this form.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION A: To vote as the Board of Directors recommends on ALL items, press 1
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION B: If you choose to vote on each item separately, press 0. You will hear these instructions:
- ------------------------------------------------------------------------------------------------------------------------------------
Item 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the instructions
Item 2 - To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://oryx.proxyvoting.com
THANK YOU FOR VOTING.
</TABLE>
<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
Edward 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
authorizes 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 7,1998 or any adjournment thereof, with all powers which the
undersigned would possess if present at the Meeting.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
OR
--
2. Call TOLL FREE 1-800-840-1208 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
--
3. Vote by Internet at our Internet Address: http://oryx.proxyvoting.com
PLEASE VOTE
