SNYDER OIL CORPORATION
Notice of Annual Meeting of Stockholders
and Proxy Statement
April 21, 1997
IMPORTANT: IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, THE ACCOMPANYING
FORM OF PROXY SHOULD BE COMPLETED, SIGNED AND RETURNED AT YOUR EARLIEST
CONVENIENCE IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
Snyder Oil Corporation
April 21, 1997
Dear Stockholder:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend your 1996 Annual Meeting of Stockholders, which will be held in Fort
Worth, Texas, on Wednesday, May 21, 1997 at 9:00 a.m. Central Standard Time.
Details of the meeting are given in the enclosed Notice of the Annual
Meeting and Proxy Statement. During the meeting, we plan to review the business
and affairs of the Company and our plans for the coming year.
Your representation and vote are important. We urge you to vote your
shares whether or not you plan to come to the Annual Meeting. Please consider,
complete, date, sign and return the enclosed proxy card promptly to eliminate a
costly follow-up mailing. You may revoke your proxy prior to or at the meeting
and still vote in person if you so desire.
Sincerely,
/s/ John C. Snyder
--------------------------
John C. Snyder
Chairman
777 Main Street Fort Worth, Texas 76102 817/338-4043
<PAGE>
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 21, 1997
To the Stockholders of Snyder Oil Corporation:
The Annual Meeting of Stockholders of Snyder Oil Corporation (the
"Company") will be held at the Petroleum Club, 39th floor of the Continental
Plaza Building, 777 Main Street, Fort Worth, Texas, on Wednesday, May 21, 1997,
at 9:00 a.m. local time. The list of stockholders entitled to vote at the
meeting will be open to the examination of any stockholder during ordinary
business hours for a period of ten days prior to the Annual Meeting at the
Company's headquarters, 777 Main Street, Fort Worth, Texas. Such list will also
be produced at the time and place of the meeting and be kept open during the
meeting for the inspection by any stockholder who may be present. The purposes
for which the meeting is to be held are as follows:
1. To elect a board of nine directors to serve for the ensuing year.
2. To approve the Company's 1989 Stock Option Plan, as amended to
comply with Section 162(m) of the Internal Revenue Code.
3. To transact any other business which properly may be brought
before the Annual Meeting or any adjournment(s) thereof.
Subject to the provisions of the By-laws of the Company, registered
stockholders as of April 4, 1997 (i) who are individuals may attend and vote at
the Annual Meeting in person or by proxy or (ii) which are corporations may
attend and vote at the Annual Meeting by proxy or by a duly authorized
representative.
Whether or not you plan to attend the Annual Meeting, please date and
sign the enclosed proxy and return it in the envelope provided. Any person
giving a proxy has the power to revoke it at any time prior to its exercise and,
if present at the Annual Meeting, may withdraw it and vote in person. Attendance
at the Annual Meeting is limited to stockholders, their proxies and invited
guests of the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter E. Lorenzen
----------------------------
Peter E. Lorenzen
Secretary
April 21, 1997
Fort Worth, Texas
<PAGE>
SNYDER OIL CORPORATION
777 Main Street
Suite 2500
Fort Worth, Texas 76102
----------------
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 1997
----------------
Introduction
The Board of Directors of Snyder Oil Corporation (the "Company") is
soliciting proxies to be voted at the Annual Meeting of Stockholders to be held
in Fort Worth, Texas on May 21, 1997 at 9:00 a.m., and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. This Proxy Statement and the enclosed proxy are first being
mailed to stockholders on or about April 21, 1997.
Voting of Proxies
This proxy solicitation is intended to afford stockholders the
opportunity to vote on the election of directors and in respect of such other
matters, if any, as may be properly brought before the Annual Meeting. The proxy
permits stockholders to withhold voting for any or all nominees for election as
directors and to vote against or abstain from voting on any other matter if the
stockholder so chooses.
At the close of business on April 4, 1997, the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting, the Company had outstanding 30,555,365 shares of common stock, $.01 par
value (the "Common Stock"). Each such share of Common Stock is entitled to one
vote at the Annual Meeting. A majority of the outstanding shares of Common Stock
is necessary to provide a quorum at the Annual Meeting.
Any proxy given may be revoked either by a written notice duly signed
and delivered to the Secretary of the Company prior to the exercise of the
proxy, by execution of a subsequent proxy or by voting in person at the Annual
Meeting. Where a stockholder's proxy specifies a choice with respect to a voting
matter, the shares will be voted accordingly. If no such specification is made,
the shares will be voted for the nominees for director and proposals identified
herein.
Election of Directors
The By-laws of the Company (the "By-laws") and Delaware Law provide
that the directors be elected annually by a plurality of the votes of the Common
Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of Directors. A stockholder's abstention from
voting will be counted in determining whether such a plurality vote was cast
only if such stockholder is represented in person or by proxy at the Annual
Meeting. Abstentions by or on behalf of shareholders not so represented and
broker non-votes will be disregarded. The Board of Directors has, by resolution,
fixed the number of directors at nine. Each nominee is presently serving as a
director and has served as a director of the Company or its predecessor for the
period indicated in his biography. The term of each director presently serving
will terminate at the Annual Meeting when the respective successor of each is
elected and qualified. Each nominee has consented to being named in this Proxy
Statement and to serve if elected. If any nominee should for any reason become
unavailable for election, proxies may be voted with discretionary authority by
the persons named therein for any substitute designated by the Board.
1
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
The Board of Directors recommends that the stockholders vote FOR the
nominees listed below.
Nominees for Election at Annual Meeting:
Roger W. Brittain (60), director since 1983, is a director of Guinness
Mahon & Co. Limited ("GM&Co."), a London merchant bank. In March 1990, he became
the Managing Director of Guinness Mahon Energy Services Limited, a subsidiary of
GM&Co. formed to provide investment banking and consultant services to the oil
and gas industry. Mr. Brittain was a founder and the Managing Director of Energy
Management and Finance Limited ("EMF"), a position he held from 1985 to
September 1989. EMF managed TR Energy Public Limited Company ("TR Energy"), an
investment company making oil and gas investments in the United States. From
1980 through October 1989, Mr. Brittain was first Managing Director and from
mid-1987 an Executive Director of TR Energy. From 1977 to 1980, Mr. Brittain was
a director of Shaw Wallace & Co. Ltd., Calcutta, India. From 1967 to 1977, he
was associated with Hill Samuel & Co. Ltd., William Brandts & Sons Ltd. and
Edward Bates and Sons Ltd., merchant banks in London. Prior to that time, Mr.
Brittain was with Her Majesty's Foreign Service. Mr. Brittain was educated at
Marlborough College and received his M.A. Degree from Balliol College, Oxford.
Mr. Brittain serves as Chairman of the Audit Committee and is a member of the
Compensation Committee. Mr. Brittain serves as a director of Seaunion Holdings
Limited, an oil and gas company listed on the Hong Kong Stock Exchange.
John A. Hill (55), director since 1981, is a Managing Director of First
Reserve Corporation, an oil and gas investment management company. Prior to
joining First Reserve, Mr. Hill was President, Chief Executive Officer and
Director of Marsh & McLennan Asset Management Company, the money management
subsidiary of Marsh & McLennan Companies, Inc. From 1979 to 1980, Mr. Hill
served as President and Chief Executive Officer of Eberstadt Asset Management
Company, the asset management division of F. Eberstadt & Co., Inc. Prior to
1976, Mr. Hill held several senior positions in the Federal Government including
Deputy Administrator of the Federal Energy Administration from 1975 to 1976 and
Deputy Associate Director of the Office of Management and Budget from 1973 to
1974. Mr. Hill received his Bachelors Degree in Economics from Southern
Methodist University and pursued graduate studies there as a Woodrow Wilson
Fellow. Mr. Hill is a trustee of the Putnam Funds in Boston and a director of
Maverick Tube Corporation, a supplier of tubular goods, and Weatherford-Enterra
Corporation, an oilfield services company. Mr. Hill serves as Chairman of the
Compensation and Governance Committees and as a member of the Executive
Committee.
William J. Johnson (62), director since 1994, is a private consultant
for the oil and gas industry and is President and a director of JonLoc Inc., an
oil and gas company of which he and his family are the sole shareholders. From
1991 to 1994, Mr. Johnson was President, Chief Operating Officer and a director
of Apache Corporation. Previously, he was a director, President and Chief
Executive Officer of Tex/Con Oil and Gas, where he served from 1989 to 1991.
Prior thereto, Mr. Johnson served in various capacities with major oil
companies, including director and President USA of BP Exploration Company,
President of Standard Oil Production Company and Senior Vice President of The
Standard Oil Company. Mr. Johnson received a Bachelor of Science degree in
Petroleum Geology from Mississippi State University and completed the Advanced
Management Course at the University of Houston. Mr. Johnson is a director of
Patina Oil & Gas Corporation ("Patina"). Mr. Johnson serves as a director of
Tesoro Petroleum Corporation, an integrated petroleum and oilfield service
company, and Camco International, an oilfield manufacturing company. Mr. Johnson
also serves on the advisory board of Texas Commerce Bank, Houston. Mr. Johnson
serves on the Audit, Compensation and Governance Committees.
William G. Hargett (47), will become a director and President and Chief
Operating Officer of the Company on May 2, 1997. Previously, Mr. Hargett was
President and a director of Greenhill Petroleum Corporation, the U.S. oil and
gas subsidiary of Australian based Western Mining Corporation, from 1994 until
the sale of Greenhill to Mesa Petroleum in April 1997. Mr. Hargett was President
of Amax Oil & Gas Inc., a subsidiary of Amax Energy Inc., from September 1993
until April 1994 when Amax was sold to Union Pacific Resources Company. From
1988 to 1993, Mr. Hargett was President and Chief Executive Officer and a
director of North Central Oil Corporation, a private exploration and production
company with both U.S. and international operations. From 1974 to 1988, Mr.
Hargett was employed by Tenneco Oil Corporation, most recently as Exploration
Manager in charge of the Gulf Coast onshore basin and Texas State offshore. Mr.
Hargett
2
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
earned his Bachelor and Master of Science degrees in geology from the University
of Alabama and has completed the Duke University Executive Education Program.
B.J. Kellenberger (71), director since 1989, is the founder and owner
of Kelloil, Inc., which is engaged in exploration and production of oil and
natural gas and secondary recovery of oil. In 1965, he founded Shenandoah Oil
Corporation and served as President, Chief Executive Officer and Chairman of the
Board until its voluntary liquidation in 1979. Mr. Kellenberger is a director of
The Jefferson Energy Foundation and a trustee of the Cassata Learning Center.
Mr. Kellenberger serves on the Audit and Executive Committees.
Harold R. Logan, Jr. (52), is being nominated for election as director
at the Annual Meeting. Mr. Logan is Executive Vice President/Finance and a
director of TransMontaigne Oil Company, a holding company engaged in providing
distribution and marketing services to the downstream sector of the oil and gas
industry. Previously, from 1985 to 1994, Mr. Logan was Senior Vice
President/Finance and a director of Associated Natural Gas Corporation. Prior to
joining Associated Natural Gas Corporation, Mr. Logan was with Dillon, Read &
Co. Inc. and Rothschild, Inc. Mr. Logan also serves as a director of Suburban
Propane Partners, L.P.
James E. McCormick (69), director since 1992, served as President,
Chief Operating Officer and a director of Oryx Energy Company from its inception
in November 1988 until his retirement in March 1992. Prior to his service with
Oryx, Mr. McCormick served from 1953 in a number of positions with the Sun
organization, most recently serving as President, Chief Executive Officer and a
director of Sun Exploration and Production Company. Mr. McCormick serves as a
director of Lone Star Technologies, B. J. Services, Inc., an oilfield service
company, and TESCO Corporation, a manufacturer of oil field drilling systems.
Mr. McCormick serves on the Compensation and Governance Committees.
Edward T. Story (53), a director and Vice President -- International of
the Company and President of SOCO International, Inc., joined the Company in
1991 and became a director of the Company in February 1996. From 1990 to 1991,
Mr. Story was Chairman of the Board of a jointly-owned Thai/US company, Thaitex
Petroleum Company. Mr. Story was co-founder, Vice Chairman of the Board and
Chief Financial Officer of Conquest Exploration Company from 1981 to 1990. He
served as Vice President Finance and Chief Financial Officer of Superior Oil
Company from 1979 to 1981. Mr. Story held the positions of Exploration and
Production Controller and Refining Controller with Exxon USA from 1975 to 1979.
He held various positions in Esso Standard's international companies from 1966
to 1975. Mr. Story received a Bachelor of Science Degree in Accounting from
Trinity University, San Antonio, Texas and a Masters of Business Administration
from The University of Texas in Austin, Texas. Mr. Story serves as a director of
First BanksAmerica, Inc., a bank holding company, Hi/Lo Automotive, Inc., a
distributor of automobile parts, Hallwood Realty Corporation, the general
partner of Hallwood Realty Partners, L.P., an American Stock Exchange-listed
real estate limited partnership, and Seaunion Holdings Limited, an oil and gas
company listed on the Hong Kong Stock Exchange.
John C. Snyder (55), a director and Chairman, founded one of the
Company's predecessors in 1978. From 1973 to 1977, Mr. Snyder was an independent
oil operator in Texas and Oklahoma. Previously, he was a director and the
Executive Vice President of May Petroleum Inc. where he served from 1971 to
1973. Mr. Snyder was the first president of Canadian-American Resources Fund,
Inc., which he founded in 1969. From 1964 to 1966, Mr. Snyder was employed by
Humble Oil and Refining Company (currently Exxon Co., USA) as a petroleum
engineer. Mr. Snyder received his Bachelor of Science Degree in Petroleum
Engineering from the University of Oklahoma and his Masters Degree in Business
Administration from the Harvard University Graduate School of Business
Administration. Mr. Snyder serves as a director of Patina Oil & Gas Corporation.
Mr. Snyder serves on the Executive Committee.
Board and Committee Meetings; Committees of the Board
The Board held nine meetings in 1996. All directors nominated for
reelection attended at least 75% of the aggregate number of meetings of the
Board of Directors and committees on which they served, except Mr. Hill, who
attended 63% of such meetings.
3
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
The Board has established four committees to assist in the discharge of
its responsibilities. The committee membership of each director is included with
his biography.
Executive Committee. The Executive Committee may exercise many of the
powers of the Board in the management of the business and affairs of the Company
in the intervals between meetings of the Board. Although the Committee has very
broad powers, in practice it meets only when it would be impractical to call a
meeting of the Board.
The Executive Committee did not meet during 1996.
Audit Committee. The Audit Committee reviews the professional services
provided by the Company's independent public accountants and the independence of
such accountants from management of the Company. This Committee also reviews the
scope of the audit coverage, the annual financial statements of the Company and
such other matters with respect to the accounting, auditing and financial
reporting practices and procedures of the Company as it may find appropriate or
as have been brought to its attention. The Audit Committee met twice during
1996.
Compensation Committee. The Compensation Committee reviews and approves
executive salaries and administers bonus, incentive compensation and stock
option plans of the Company. This Committee advises and consults with management
regarding other benefits and significant compensation policies and practices of
the Company. This Committee also considers nominations of candidates for
corporate officer positions. The Compensation Committee met four times during
1996.
Governance Committee. The Governance Committee was established to make
recommendations to the Board of Directors regarding policies on the composition
of the Board and committees of the Board, criteria for selection of nominees for
election to the Board and committees thereof, the roles and functions of
committees of the Board, nominees for membership on the Board and removal of
members of the Board. The Governance Committee met twice during 1996.
Director Compensation
Non-employee directors of the Company receive an annual retainer,
payable quarterly, of 2,000 shares of the Company's common stock. In addition,
non-employee directors receive $2,000 for attendance at each Board of Directors
meeting, and $750 for attendance at each meeting of a committee of the Board of
Directors, in each case excluding telephone meetings. Non-employee directors are
also reimbursed for expenses incurred in attending Board of Directors and
committee meetings, including those for travel, food and lodging. Directors and
members of committees of the Board of Directors who are employees of the Company
or its affiliates are not compensated for their Board of Directors and committee
activities.
The Directors Stock Plan also provides that the Company will
automatically grant to each non-employee director, on the date of his
appointment, election, reappointment or reelection as a member of the Board of
Directors, a stock option for 2,500 shares of common stock. The exercise price
for all Director Options is the fair market value on the date of grant. The
duration of each option is five years from the date of award, and each option
vests as to 30% of the shares covered after one year, an additional 30% of the
shares after two years, and all remaining shares three years after the date of
grant.
Beneficial Ownership of Securities
The following table provides information as to the beneficial ownership
of common stock of the Company as of April 4, 1997, by each person who, to the
knowledge of the Company, beneficially owned 5% or more of the common stock,
each director of the Company and by all executive officers and directors of the
Company as a group. No directors or executive officers of the Company
beneficially owns any equity securities of the Company other than common stock.
The business address of each individual listed below is: c/o Snyder Oil
Corporation, 777 Main Street, Fort Worth, Texas 76102.
4
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock
--------------------------------------------
Number of Percent of
Shares Class
Owner Owned (a)(b) Outstanding
- -------------------------- ----------------- -------------------
<S> <C> <C>
John C. Snyder 1,944,553 6.3 %
Edward T. Story 57,620 *
Roger W. Brittain 28,785 *
John A. Hill 102,454 *
William P. Johnson 8,950 *
William G. Hargett 0 *
B.J. Kellenberger 21,023 *
Harold R. Logan, Jr. 0 *
James E. McCormick 18,950 *
All executive officers
and directors as a group 2,640,405 8.5
Thomas J. Edelman (c) 1,611,481 5.2
The Crabbe Huson Group, Inc. (d) 2,842,600 9.0
GEM Capital Management, Inc. (e) 2,006,407 6.3
Franklin Resources Inc. (f) 2,223,875 6.6
Union Pacific Corp. (g) 2,053,231 6.2
- --------------------------
<FN>
* Less than 1%.
(a) The number of shares in the table includes 238,140 shares that the named
executive officers and directors and 501,170 shares that all executive
officers and directors as a group have the right to acquire within 60 days
after April 4, 1997 including 137,700 for Mr. Snyder and 57,620 for Mr.
Story.
(b) Of the shares shown, beneficial ownership of 302,660 is disclaimed by Mr.
Snyder and 302,660 by all executive officers and directors as a group. To
the knowledge of the Company, each person holds sole investment and voting
power over the shares shown, except Mr. Snyder shares such powers with
respect to 660 shares, Mr. Hill shares investment power with respect to
37,006 shares, Mr. Brittain shares investment power with respect to 500
shares and all officers and directors as a group share such powers with
respect to 41,526 shares.
(c) Includes 292,600 shares that Mr.Edelman has the right to acquire within 60
days after April 4, 1997. Mr.Edelman has sole investment and voting power
over the shares shown, except 167,198 shares with respect to which Mr.
Edelman shares such powers. Mr. Edelman disclaims beneficial ownership of
155,198 of the shares shown.
(d) The number of shares is based on information set forth in the Schedule 13G
dated February 7, 1997 by The Crabbe Huson Group, Inc, The Crabbe Huson
Special Fund, Inc. and Crabbe Huson Small Cap Fund. As reported therein,
the number of shares includes, 1,647,700 shares of common stock owned by
The Crabbe Huson Special Fund, Inc., 41,200 shares of common stock owned
by The Crabbe Huson Small Cap Fund, and 1,153,700 shares of common stock
held by investors for whom The Crabbe Huson Group serves as investment
advisor and with whom it shares voting and dispositive power.
(e) The number of shares reported is based on information set forth in
Amendment No. 2 to Schedule 13D dated January 21, 1997 filed by Gem
Capital Management, Inc., Oak Tree Partners, L.P., GEM Convertible
Securities Partners, L.P., GBU Inc. and Gerald B. Unterman. As reported
therein, Oak Tree was the beneficial owner of 689,977 shares of common
stock, GEM Capital, through various managed accounts over which it has
investment discretion, was the beneficial owner of 1,246,570 shares
(including 517,071 which its managed accounts have the right to acquire
upon conversion of preferred stock), and GEM Convertible was deemed to be
the beneficial owner of 60,860 shares issuable upon conversion of
preferred stock.
5
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
(f) The number of shares reported is based on information set forth in the
Schedule 13G dated February 12, 1997 filed by Franklin Resources Inc.,
Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisors, Inc.
("Advisors"). The number of shares reported represents shares assumed to
be issued upon conversion of 332,030 shares of convertible preferred stock
and $42.5 million principal amount of convertible notes held by investment
companies or other managed accounts advised by Advisors. Advisors has sole
investment and voting power with respect to such securities.
(g) Represents shares that may be purchased by Union Pacific Resources
Company, a subsidiary of Union Pacific Corp., upon exercise of warrants.
Such person's address is Martin Tower, Eighth and Eaton Avenues,
Bethlehem, Pennsylvania 18018.
</FN>
</TABLE>
Executive Compensation
Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1996, 1995 and 1994 of those persons who were at December 31,
1996 the chief executive officer and the other four most highly compensated
executive officers of the Company (the "Named Officers").
<TABLE>
Summary Compensation Table (a)
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- --------------------------
Stock
Option All
Name and Position Year Salary Bonus (b) Awards (c) Other (d)
- ----------------------- -------- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
John C. Snyder 1996 $381,652 $400,000 48,700 $41,179
Chairman and Chief 1995 364,992 100,000 48,600 41,543
Executive Officer 1994 363,324 0 48,000 89,232
Thomas J. Edelman (e) 1996 356,652 913,795 45,300 67,500
President of the Company; 1995 339,984 140,000 45,300 41,543
Chairman, Patina Oil 1994 338,320 0 44,000 89,232
& Gas Corporation
Edward T. Story 1996 211,167 163,795 (f) 15,400 41,179
Vice President, 1995 192,000 100,000 30,000 41,543
International 1994 190,833 60,000 10,000 39,232
Peter C. Forbes (g) 1996 176,923 110,000 25,000 0
Vice President, 1995 68,077 37,000 0 0
Offshore
Rodney L. Waller 1996 143,667 125,000 26,000 40,354
Vice President, 1995 137,000 80,000 18,500 39,807
Special Projects 1994 136,166 20,000 10,600 31,472
</TABLE>
- ------------------------
(a) Excludes the cost to the Company of other compensation that, with
respect to any Named Officer, does not exceed the lesser of $15,000 or
10% of the Named Officer's salary and bonus.
(b) Bonuses are paid in March of each year based on performance during the
preceding year. Bonus amounts are included in the year preceding the
year in which the bonus is paid.
(c) Stock options are generally granted in February of each year based in
part on performance during the preceding year.
6
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Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
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(d) Includes amounts accrued for the fiscal year for the Named Officers
under the Company's Profit Sharing and Savings Plan and as matching
contributions under the Company's Deferred Compensation Plan for Select
Employees as follows:
<TABLE>
<CAPTION>
Profit Sharing Plan Deferred Compensation Plan
----------------------------- -----------------------------
1994 1995 1996 1994 1995 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder $14,232 $16,543 $16,179 $75,000 $25,000 $25,000
Thomas J. Edelman 14,232 16,543 30,000(x) 75,000 25,000 37,500(x)
Edward T. Story 14,232 16,543 16,179 25,000 25,000 25,000
Peter C. Forbes N/A 0 16,179 N/A 0 0
Rodney L. Waller 12,602 14,807 15,345 18,870 25,000 25,000
--------------------------
(x) Of such amounts, Patina accounted for $13,821 under the Profit
Sharing Plan and $12,500 under the Deferred Compensation Plan.
</TABLE>
(e) On July 1, 1996, Mr. Edelman became Chairman of Patina, a 74% owned
subsidiary of the Company that is listed on the New York Stock
Exchange. Mr. Edelman's salary for 1996 includes $166,660 which was
either received by him as salary from Patina or for which the Company
was reimbursed by Patina for his services. Mr. Edelman's bonus for
1996 included $163,795 in profits realized by him upon his exercise of
options issued to him by Command Petroleum Ltd. ("Command") in
consideration of his service as a director. These options had been
held by Mr. Edelman on behalf of the Company.
(f) Mr. Story's bonus is represented by the profit realized by Mr. Story
upon his exercise of options issued to him by Command in consideration
of his service as a director. These options had been held by Mr. Story
on behalf of the Company.
(g) Mr. Forbes's salary for 1995 represents his salary from July 1, 1995,
the date on which he commenced employment with a subsidiary of the
Company, through December 31, 1995.
Stock Options
The Company's stock option plan, which is administered by the
Compensation Committee, provides for the granting of options to purchase shares
of common stock to key employees of the Company and its affiliates and certain
other persons who are not employees of the Company or its affiliates, but who
from time to time provide substantial advice or other assistance or services to
the Company or its affiliates. The plan permits options to acquire up to three
million shares of common stock to be outstanding at any one time. During 1996,
options to purchase 517,050 shares of common stock were granted to 104 employees
at an average exercise price of $9.50 per share. The exercise price of all such
options was equal to the fair market value of the common stock on the date of
grant. All options granted during 1996 were for a term of five years, with 30%
of the options becoming exercisable after one year, an additional 30% becoming
exercisable after two years and the remaining options becoming exercisable after
the three years.
Shown below is information with respect to (a) options granted during
1996 to the Named Officers and (b) options to purchase common stock granted in
1996 and prior years under the Company's stock option plans to the Named
Officers and either exercised by them during 1996 or held by them at December
31, 1996.
7
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
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<TABLE>
Stock Option Grants
<CAPTION>
Potential Realizable Value
Percentage at Assumed Annual Rates of
of Total Stock Price Appreciation (a)
Options Grants in Exercise Expiration ----------------------------
Name Granted Year Price Date 5% 10%
- ----------------- --------- ----------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder 48,700 9.42% $9.375 2/20/01 $126,140 $278,736
Thomas J. Edelman 45,300 8.76% $9.375 2/20/01 $117,333 $259,276
Edward T. Story 15,400 2.98% $9.375 2/20/01 $ 39,888 $ 88,142
Peter C. Forbes 25,000 4.84% $9.375 2/20/01 $ 64,753 $143,088
Rodney L. Waller 11,000 2.13% $9.375 2/20/01 $ 25,492 $ 62,959
15,000 2.90% $9.500 5/21/01 $ 39,370 $ 86,998
<FN>
(a) The assumed annual rates of stock price appreciation used in showing the
potential realizable value of stock option grants are prescribed by
rules of the Securities and Exchange Commission. The actual realized
value of the options may be significantly greater or less than the
amounts shown. For options granted during 1996 at an exercise price of
$9.375, the values shown for 5% and 10% appreciation equate to a stock
price of $11.97 and $15.10, respectively, at the expiration date of the
options.
</FN>
</TABLE>
<TABLE>
Stock Option Exercises and Year End Values
<CAPTION>
Value of
Number of Unexercised Unexercised In-the-Money
Options at Year End 1996 Options at Year End 1996
Shares Acquired Value -------------------------- --------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Snyder 92,000 $580,750 89,380 101,920 $248,635 $500,165
Thomas J. Edelman 43,000 91,375 125,990 94,610 721,418 465,458
Edward T. Story 0 0 40,000 40,400 29,250 191,450
Peter C. Forbes 0 0 0 25,000 0 200,000
Rodney L. Waller 10,000 18,750 31,910 43,190 175,538 248,213
</TABLE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Compensation Committee of the Board of Directors, which is composed
of independent members of the Board, establishes the general compensation
policies of the Company, establishes the compensation plans and compensation
levels for officers and certain other key employees and administers the
Company's stock option plan and deferred compensation plan. In establishing
compensation levels, the Committee establishes the specific compensation of
Messrs. Snyder and Edelman. The Committee establishes salary and bonus ranges
for other officers and key employees, and generally approves specific amounts
within those ranges on the recommendation of management.
In establishing compensation policies, the Committee believes that the
cash compensation of executive officers, as well as other key employees, should
be competitive with other companies while, within the Company, being fair and
discriminating on the basis of personal performance. Annual awards of stock
options are intended both to retain executives and to motivate them to improve
long-term stock market performance.
In establishing total cash compensation (base salary plus "expected
bonus") for its executives, the Company targets the median cash compensation for
competitors of executives having similar responsibilities. Adjustments, in large
part subjective, are made to account for cases in which the responsibilities of
Company executives differ from the responsibilities of executives of the
companies surveyed. Base salaries have historically been set below the median,
so that bonuses, which,
8
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
except for the most senior officers, are primarily determined by individual
performance, will constitute a larger portion of cash compensation. The
Committee is advised annually by independent consultants as to compensation
levels of competitors, based on detailed data relating to approximately 30
companies believed to be most comparable to the Company as well as the results
of more general surveys. The companies surveyed by the independent consultants
are selected by the consultants in consultation with the Committee and are
intended to be most representative of the companies with which the Company
competes for its personnel requirements. Guided by this survey, compensation
ranges are established, and individual executive compensation within these
ranges is determined based upon the individual's responsibilities and
performance.
Mr. Snyder's base salary was increased $20,000, or approximately 5.5%,
effective March 1, 1996. Generally, changes in Mr. Snyder's compensation are not
based on any particular measure of performance, but are determined subjectively
by the Committee based on corporate performance, salaries of chief executive
officers of comparable companies and other factors considered applicable by the
Committee.
Mr. Snyder's bonus is based primarily on Company performance. The
Committee has not established any particular formula or singled out particular
factors as more important than others. The Committee considers various factors,
including growth in reserves, net income and cash flow, as well as performance
of the Company's common stock. The Committee also considers other matters, such
as the extent to which these factors were influenced by management decisions
during the year and steps taken by management to position the Company for future
growth. Based on these and other considerations, the Committee awarded Mr.
Snyder a bonus of $400,000 for 1996. In arriving at this amount, the Committee
considered, among other things, that nearly all aspects of Company performance
during 1996 showed significant improvement. The Committee also considered
actions taken during 1996, including sales of assets, the redeployment of
capital to redistribute the Company's assets and enhance its focus and
implementation of additional controls and reporting systems, that were directed
toward enhancing the Company's financial condition and improving future
performance. Mr. Edelman was awarded a bonus of $500,000 for 1996 performance.
In making this award, the Committee considered that the Committee had already
awarded Mr. Edelman a special bonus of $250,000 during the year upon formation
of Patina Oil & Gas Corporation, a transaction initiated and implemented by Mr.
Edelman, and had allowed Mr. Edelman to retain approximately $164,000 of profits
realized upon the exercise of options granted to him (and held for the Company's
benefit) by Command Petroleum Limited. The profits on the Command option were
realized when the Company's investment in Command, which had been initiated by
Mr. Edelman, was acquired in a transaction that resulted in a $65.5 million
pretax gain to the Company. In the aggregate, $414,000 of Mr. Edelman's
incentive compensation for 1996 was based on the success of these two specific
transactions. The remainder of Mr. Edelman's incentive compensation was based on
progress in other strategic projects under his direction, including growth of a
substantial presence in the Gulf of Mexico and increasing value to the Company's
shareholders through greater recognition of the value of the Company's
international investments. Bonuses for other officers and key employees are
influenced by Company performance, but are determined primarily based on senior
management's assessment of performance of the executive's duties and success in
attaining specific performance goals which are directed toward improving
operating unit and Company performance. In the aggregate, bonuses awarded to
executive officers for 1996 were significantly higher than in prior years,
reflecting the Committee's view that Company performance had improved
significantly in nearly all areas.
Stock options are granted annually to Mr. Snyder and other executives
and key employees to retain and motivate the grantees and to improve long-term
stock market performance. Options are granted only at the prevailing market
price and will have value only if the price of the Company's common stock
increases. Generally, options have a term of five years and vest 30% after one
year, an additional 30% after two years and are fully vested after three years;
an employee must be employed by the Company at the time of vesting in order to
exercise the options.
The Committee generally determines the number of options granted to Mr.
Snyder and to other executives and key employees based on a formula under which
the number of options granted is equal to a percentage, which varies with the
degree to which an individual's responsibilities might affect the long-term
price of the Company's stock, of the individual's base salary. The Committee
occasionally grants additional options when the Committee believes additional
incentives are appropriate. One such award of 15,000 options to Mr. Waller was
made during 1996.
9
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
The Committee maintains a Deferred Compensation Plan for Select
Employees as a means to provide additional incentives for key employees to
remain in the employ of the Company. Under the Plan, key employees selected by
the Committee are permitted the defer a portion of their compensation for
periods determined by them or until their employment by the Company ceases. The
Committee also determines annually the matching contribution to be made by the
Company and may, in addition, authorize additional Company contributions to be
made on behalf of designated individuals. Company matching contributions vest
over three years through December 31, 1996 and four years thereafter, and
additional Company contributions vest over the period determined by the
Committee. The Committee designated 21 key employees, including all executive
officers, as eligible to participate during 1996 and determined that Company
contributions would equal one-third of each participant's contribution, up to a
maximum Company contribution of $25,000 for any participant.
COMPENSATION COMMITTEE
John A. Hill, Chairman
Roger W. Brittain
William J. Johnson
James E. McCormick
Shareholder Return Performance Presentation
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's common stock against the
total return of the Dow Jones Equity Market Index and the Dow Jones Secondary
Oils Index for the calendar years 1992 through 1996. None of the companies on
the Dow Jones Secondary Oils Index is included in the companies surveyed as to
compensation levels by the independent consultants advising the Compensation
Committee of the Board of Directors. The Index is composed of thirteen
companies, all of which are significantly larger than the Company, selected by
Dow Jones & Company, Inc. to represent non-major oil producers that generally do
the bulk of their business domestically. The graph assumes that the value of the
investment in the Company's common stock and each index was $100 on January 1,
1992 and that all dividends were reinvested. The closing sales prices of the
Company's common stock on the last trading days of 1991 and 1996 were $6.75 and
$17.375, respectively.
Line graph showing the Company, Dow Jones Equity Market Index, and Dow Jones
Secondary Oils Index for December 31, 1991-1996, including the following data
points (rounded to the nearest whole dollar):
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Company $100 $153 $275 $234 $192 $285
DJ Equity 100 109 119 120 167 206
DJ Secondary Oils 100 98 99 110 106 123
</TABLE>
10
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
Employment Agreements and Change in Control Arrangements
The Board of Directors has adopted a change in control protection plan
under which the Company is authorized to enter into agreements with senior level
employees (other than Mr. Snyder) providing for twelve months' continuation of
salary and benefits if, within six months following a change of control of the
Company, such employee terminates his employment with the Company for good
reason, as defined, or is terminated by the Company other than for cause, as
defined. Such agreements also provide that the Company will take such action as
will be necessary to cause all stock options granted to the employee to become
immediately exercisable. The Company has entered into such agreements with each
of its officers other than Mr. Snyder. Under the change of control protection
plan, all employees of the Company not party to such agreements (other than Mr.
Snyder) who have completed one year of service with the Company would be
entitled to continuation of salary and benefits for a period of three months
after termination in similar circumstances. In addition, the Company's Deferred
Compensation Plan for Select Employees provides that all Company contributions
made on behalf of participants will become fully vested upon a change of
control. Other than the foregoing, the Company has not entered into any
employment contracts with any of its current officers.
On April 15, 1997, the Company and Mr. Hargett executed an employment
agreement (the "Employment Agreement") pursuant to which Mr. Hargett will serve
as President and Chief Operating Officer of the Company, effective May 2, 1997.
The Employment Agreement provides for (a) a minimum annual base salary of
$325,000, (b) a minimum bonus for 1997 in the amount of $90,278, (c) a $50,000
payment to cover Mr. Hargett's expenses for relocating to Fort Worth and (d) an
initial grant of a five-year option (vesting over three years) to purchase
200,000 shares of Common Stock at a price per share equal to the fair market
value of a share of Common Stock on May 2, 1997. The Employment Agreement has an
initial four-year term, and unless either party terminates the Employment
Agreement or provides notice that the term should not be extended, the term will
be extended automatically for an additional one year period as of May 2 of each
year (beginning on May 2, 1999). As a result, the Employment Agreement will
generally have a remaining term of at least two years.
If Mr. Hargett's employment is terminated by the Company without
"cause" (as defined) or by Mr. Hargett because of a material breach of the
Employment Agreement by the Company, a material reduction in his duties and
responsibilities or the assignment to him of duties that are materially
inconsistent with his positions with the Company, then (a) the Company will pay
Mr. Hargett a lump sum equal to the aggregate base salary for the remaining term
and (b) all stock options awarded to Mr. Hargett will become fully exercisable
for a limited period of time. Mr. Hargett will also receive these termination
benefits if he terminates his employment (i) for any reason whatsoever on or
within 12 months after a "change in control" (as defined) or (ii) during the
60-day period commencing on May 2, 1999 because, in his judgment, and subject to
the concurrence of the Compensation Committee, the scope of his authority within
the Company is not appropriate. In addition, if any payment or distribution to
Mr. Hargett, whether or not pursuant to the Employment Agreement, is subject to
federal excise tax on "excess parachute payments," the Company is required to
pay an additional amount so that Mr. Hargett receives, net of taxes, an amount
sufficient to pay all such excise taxes.
Certain Transactions and Relationships
In 1991, SOCO International, Inc.("SOCO International") was formed as a
corporation 90% owned by the Company and 10% owned by Edward T. Story, who also
became President of SOCO International. Mr. Story also held an option to
increase his interest in SOCO International to 30%. During 1993, the Company
purchased from Mr. Story the 10% of SOCO International held by him and canceled
Mr. Story's option to purchase an additional 20% of the company. The purchase
price, approximately $28,000, was equal to the cost of Mr. Story's investment in
the Company. In connection with the purchase, the Company granted Mr. Story an
option to purchase 10% of the shares of SOCO International, which has been
financed primarily by Company loans, through April 1998 for $590,500. Mr. Story
was appointed Vice President International of the Company and became a director
in February 1996.
In December 1997, following the sale of SOCO International's interest
in Command Petroleum Limited to Cairn Energy plc ("Cairn") and in contemplation
of a possible public offering of the Company's international operations during
1997, the Company reorganized SOCO International by transferring its assets to
two subsidiaries. One subsidiary, SOCO International Holdings, Inc. ("Holdings")
received 16.2 million shares of Cairn (having a market value exceeding $100
11
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
million at the time). The other subsidiary, SOCO International Operations, Inc.
("Operations"), received all of SOCO International's other investments. In
connection with the reorganization, Mr. Story assigned his option to acquire 10%
of SOCO International and delivered notes totaling $590,500 (equal to the
exercise price of the option) to Holdings and Operations and was issued 10% of
the shares of each company. The notes are unsecured, bear interest at the rate
of 1% per month and mature on April 10, 1998 (the expiration date of the
option).
Thomas J. Edelman resigned as a director and President of the Company
in February 1997. Through May 1, 1997, Mr. Edelman will remain as an employee of
the Company to assist in certain transitional matters. In connection with Mr.
Edelman's resignation the Company has agreed, subject to negotiation and
execution of definitive agreements, (a) to make severance payments at the rate
of $30,000 per month through May 2000 and (b) that the 292,600 stock options
previously granted to Mr. Edelman, at exercise prices ranging from $6 to $181/8
per share, would remain exercisable through March 1, 2002. It is expected that
the Company and Mr. Edelman will also enter into a consulting agreement under
which Mr. Edelman will agree, subject to his reasonable availability, to provide
consulting and advisory services as may be requested by the Board of Directors
or Chief Executive Officer of the Company. The consulting agreement is expected
to provide for a monthly fee of $10,000 and have a term of three years, subject
to the right of either party to terminate the agreement after one year on 30
days' notice. In addition, Mr. Edelman and the Company may from time to time
enter into fee agreements relating to transactions Mr. Edelman identifies or on
which he provides assistance to the Company. Mr. Edelman continues to serve as
Chairman and a director of Patina.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who beneficially own more than ten percent of
the Company's stock to file initial reports of ownership and reports of changes
of ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Copies of such reports are required to be furnished to the Company.
Based solely on a review of such forms furnished to the Company and
certain written representations from the executive officers and directors, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners were
complied with on a timely basis, except that one sale by Mr. Steven M. Burr,
Vice President--Engineering and Planning, of 500 shares of common stock in
November 1996 was reported on December 18, 1996 and one sale by James H.
Shonsey, Vice President--Finance, of 16,650 shares of common stock in December
1996 was reported on February 12, 1997.
Approval of 1989 Stock Option Plan, as amended
The Company maintains its 1989 Stock Option Plan (the "Plan") both to
retain executives and other key employees and to motivate them to improve
long-term stock market performance. Under the Plan options to acquire up to
3,000,000 shares of common stock may be outstanding at any time. As of April 4,
1997, options to acquire 2,111,990 shares of common stock were outstanding under
the Plan.
Information relating to options awarded to the Named Officers during
1996 is set forth above under "Stock Options." During 1996 options for 517,050
shares of Common Stock were granted under the Plan, at exercise prices ranging
from $9.375 per share to $10.625 per share, including 160,400 options granted to
the Named Officers as a group and 238,400 options granted to all executive
officers as a group.
Options for 612,600 shares of Common Stock have been granted to 80
officers and key employees under the Plan to date during 1997 all at an exercise
price of $16.125 per share, including options granted to Messrs. Snyder,
Edelman, Story, Forbes and Waller to purchase 77,000, 72,000, 21,500, 35,000 and
22,000 shares respectively, and 328,900 options granted to all executive
officers as a group.
The following summary of the Plan and the proposed amendments to the
Plan is qualified in its entirety by the full text of the Plan. Stockholders may
obtain a copy of the Plan and the amendments on request to the Company at 777
Main
12
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
Street, Suite 2500, Fort Worth, Texas 76102, Attention: Investor Relations. For
additional information regarding option awards to certain officers, see "Stock
Options," above.
The proposed amendments to the Plan (the "Proposed Amendments") include
provisions which (i) limit the number of shares of Common Stock with respect to
which options may be granted to any individual during any calendar year to
450,000, commencing with the 1997 calendar year, and (ii) require the
Compensation Committee to be constituted to comply with the requirements of
Section 162(m) of the Internal Revenue Code (the "Code"), as described below.
These provisions are intended to preserve the Company's ability to deduct, for
U. S. income tax purposes, compensation recognized by certain optionees upon
exercise of a nonqualified stock option or upon a disqualifying disposition of
an incentive stock option. Section 162(m) of the Code denies a deduction by an
employer for certain compensation in excess of $1 million per year paid by a
publicly traded corporation to the chief executive officer and the four most
highly compensated executive officers, other than the chief executive officer,
at the end of the taxable year. Compensation with respect to stock options will
be excluded from this deduction limit if it satisfies certain requirements,
including the following: (i) the stock options must be granted at an exercise
price not lower than fair market value at date of grant; (ii) the stock option
grant must be made by a compensation committee composed of two or more "outside
directors" within the meaning of Section 162(m); (iii) the plan under which the
stock option is granted must state the maximum number of shares with respect to
which options may be granted during a specified period to any individual; and
(iv) the material terms pursuant to which the compensation is to be paid must be
disclosed to, and approved by, shareholders in a separate vote prior to payment.
Prior to the Proposed Amendments, the Plan did not have any limitation on the
maximum number of shares with respect to which options may be granted to any
individual.
The following is a summary of the material provisions of the Plan that are not
affected by the Proposed Amendments.
The Plan provides for the granting of options to purchase shares of
Common Stock to certain key employees of the Company, including officers and
directors who are also employees of the Company or its affiliates, and certain
other persons who are not employees or directors of the Company or its
affiliates but who from time to time provide substantial advice or other
assistance or services to the Company or its affiliates. The Plan permits
options to acquire up to 3,000,000 shares of Common Stock, subject to certain
adjustments described below, to be outstanding at any time. Subject to such
limitation, there is no limit on the absolute number of awards that may be
granted during the life of the Plan. Currently, there are approximately 80
employees of the Company who, in management's opinion, would be considered
eligible to receive grants under the Plan, although fewer employees may actually
receive grants.
The Plan is administered by a committee (the "Committee") of
independent members of the Board of Directors which has the authority to award
options and to determine the terms and conditions (which need not be identical)
of such options, including the persons to whom, and the time or times at which,
options will be awarded, the number of options to be awarded to each such
person, the exercise price of any such options and the form, terms and
provisions of any agreement pursuant to which such options are awarded.
The Committee determines the terms under which an option becomes
exercisable and the period, not exceeding ten years from the date of grant,
during which the option may be exercised. To date, substantially all options
granted under the Plan have had a term of five years from the date of grant,
with 30% of the options becoming exercisable after one year, an additional 30%
becoming exercisable after two years and the remaining options becoming
exercisable after the three years.
Any option may be either incentive or non-incentive stock options
depending on the terms of such options. The exercise price of the shares of
stock covered by an incentive stock option may not be less than the fair market
value of stock on the date of award and the exercise price of the shares of
stock covered by each option that is not an incentive stock option may not be
less than 50% of the fair market value of the stock on the date of award. The
exercise price of all options granted to date has been equal to the fair market
value on the date of award. Under the Plan, the aggregate fair market value
(determined as of the time an option is granted) of stock for which incentive
stock options may be granted to an individual that are exercisable for the first
time in any one year may not exceed $100,000.
13
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
Payment for stock issued upon the exercise of an option may be made in
cash or, with the consent of the Committee, in whole shares of stock owned by
the holder of the option for at least six months prior to the date of exercise
or partly in cash and partly in such shares of stock. If payment is made, in
whole or in part, with previously owned shares of stock, the Committee may issue
to such holder a new option for a number of shares equal to the number of shares
delivered by such holder to pay the exercise price of the previous option having
an exercise price equal to not less than 100% of the fair market value of the
stock on the date of such exercise. To date, the Committee has not issued any
new options under this provision.
No tax obligation will arise for the optionee or the Company upon the
granting of either incentive stock options or non-qualified stock options under
the Plan. Upon exercise of a non-qualified stock option, an optionee will
recognize ordinary income in an amount equal to the excess, if any, of the fair
market value, on the date of exercise, of the stock acquired over the exercise
price of the option. Thereupon, the Company will, subject to the provisions of
Section 162(m) of the Code, be entitled to a tax deduction in an amount equal to
the ordinary income recognized by the optionee. Any additional gain or loss
realized by an optionee on disposition of the shares generally will be capital
gain or loss to the optionee and will not result in any additional tax deduction
to the Company.
Upon the exercise of an incentive stock option, and optionee recognizes
no immediate taxable income. The tax cost is deferred until the optionee
ultimately sells the shares of stock. If the optionee does not dispose of the
option shares within two years from the date the option was granted and within
one year after the exercise of the option, and the option is exercised no later
than three months after the termination of the optionee's employment, the gain
or the sale will be treated as long term capital gain. Subject to the
limitations in the Plan, certain of these holdings periods and employment
requirements are liberalized in the event of the optionee's death or disability
while employed by the Company. The Company is not entitled to any tax deduction,
except that if the stock is not held for the full term of the holding period
outlined above, the gain on the sale of such stock, being the lesser of (i) the
fair market value of the stock on the date of exercise minus the option price,
or (ii) the amount realized on disposition minus the option price, will be taxed
to the optionee as ordinary income and, subject to the provisions of Section
162(m) of the Code, the Company will be entitled to a deduction in the same
amount. Any additional gain or loss realized by an optionee upon disposition of
shares prior to the expiration of the full term of the holding period outlined
above, generally will be capital gain or loss to the optionee and will not
result in any additional tax deduction to the Company. The "spread" upon
exercise of an incentive stock option constitutes a tax preference item within
the computation of the "alternative minimum tax" under the Code. The tax
benefits which might otherwise accrue to an optionee may be affected by the
imposition of such tax if applicable to the optionee's individual circumstances.
To the extent that an optionee pays all or part of the option price by
tendering shares of common stock owned by the optionee, the rules described
above apply, except that a number of shares received upon the exercise equal to
the number of shares surrendered as payment of the option price will have the
same basis and tax holding period as the shares of common stock tendered.
As discussed above, Section 162(m) of the Code may limit the Company's
ability to claim a corporate deduction upon exercise of a non-incentive option
or upon the disqualifying disposition of an incentive option. In general terms,
Section 162(m) denies a corporate deduction for certain compensation in excess
of $1 million per year paid by a publicly traded corporation to the chief
executive officer and the four most highly compensated executive officers other
than the chief executive officer at the end of the taxable year. Certain
compensation, including certain performance-based compensation, will be excluded
from this deduction limit. Compensation with respect to stock option plans that
satisfy certain criteria will be considered performance-based and will be
excluded from the compensation taken into account for purposes of the $1 million
deduction limit. Consequently, the Company may not be permitted to claim a
corporate deduction for the full amount realized upon exercise of options by the
chief executive officer and the four most highly compensated executive officers,
other than the chief executive officer, at the end of that tax year in the event
that the compensation with respect to the options exercised is not treated as
performance-based for purposes of Section 162(m).
Approval of the amendment to the Plan requires the affirmative vote of
the holders of a majority of the shares of common stock present in person or by
proxy at the Annual Meeting and entitled to vote. A stockholder's abstention
from voting will be counted in determining whether such a majority vote was cast
only if such shareholder is so represented. Abstentions by shareholders not so
represented and broker non-votes will be disregarded.
14
<PAGE>
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
- --------------------------------------------------------------------------------
The Board of Directors believes that the proposal is in the best
interests of the Company and its stockholders and recommends that the
stockholders vote FOR approval of the Plan as amended.
Other Business
The Board does not know of any business to be presented for
consideration at the Annual Meeting other than as stated in the Notice. It is
intended, however, that the persons authorized under the accompanying proxy
will, in the absence of instructions to the contrary, vote or act in accordance
with their judgment with respect to any other proposal properly presented for
action at such meeting.
Submission of Proposals by Stockholders
In order to be eligible for inclusion in the Company's proxy statement
for the 1998 Annual Meeting of Stockholders, any proposal of a stockholder must
be received by the Company at its principal executive office in Fort Worth,
Texas by December 23, 1997.
Relationship with Independent Auditors
Arthur Andersen LLP is the principal accountant selected by the
Company. Representatives of such firm are expected to be present at the Annual
Meeting, with the opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions.
Annual Report and Form 10-K
The 1996 Annual Report of the Company for the fiscal year ended
December 31, 1996, including audited financial statements, is being forwarded to
each stockholder of record as of April 4, 1997, together with this Proxy
Statement.
A copy of the Company's annual report on Form 10-K for 1996, as filed
with the Securities and Exchange Commission, will be furnished without charge to
stockholders on request to:
Snyder Oil Corporation
777 Main Street
Fort Worth, Texas 76102
Attention: Investor Relations
Other Matters
The accompanying form of proxy has been prepared at the direction of
the Company, of which you are a stockholder, and is sent to you at the request
of the Board of Directors. The proxies named therein have been designated by
your Board of Directors.
The Board of Directors of the Company urges you, even if you presently
plan to attend the meeting in person, to execute the enclosed proxy and mail it
as indicated immediately. You may revoke your proxy and vote in person if you
are in fact able to attend.
SNYDER OIL CORPORATION
By Order of the Board of Directors
/s/ Peter E. Lorenzen
-----------------------
Peter E. Lorenzen
Secretary
Fort Worth, Texas
April 21, 1997
15
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SNYDER OIL CORPORATION
The undersigned hereby appoints Peter E. Lorenzen, Rodney L. Waller and
Richard A. Wollin as proxies, with power to act without the other and with power
of substitution, and hereby authorizes them to represent and vote, as
designated on the other side, all the shares of stock of Snyder Oil Corporation
standing in the name of the undersigned with all powers which the undersigned
would possess if present at the Annual Meeting of Stockholders of the Company to
be held May 21, 1997 or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
Please mark
your votes as
indicated in
this example /X/
The Board of Directors recommends a
vote FOR items 1 and 2.
Item 1-Election of Directors WITHHELD
Nominees: FOR FOR ALL
/ / / /
Roger W. Brittain
William G. Hargett
John A. Hill FOR AGAINST ABSTAIN
William J. Johnson ITEM 2-APPROVAL OF THE / / / / / /
B. J. Kellenberger EMPLOYEE STOCK
Harold R. Logan, Jr. OPTION PLAN, AS
James E. McCormick AMENDED
John C. Snyder
Edward T. Story
WITHELD FOR: (Write that nominee's name in the space provided below)
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Signature Signature Date
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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.
