SCHEDULE 14A
============
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant X
---
Filed by a Party other than the Registrant
---
Check the appropriate box:
Preliminary Proxy Statement
- ---
X Definitive Proxy Statement
- ---
Definitive Additional Materials
- ---
Soliciting Materials Pursuant to Sec. 240.14a-11(c) or Section 240.14a-
- --- 12
MESA INC.
=========
(Name of Registrant as Specified In Its Charter)
William D. Ballew
-----------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
- ---
$500 per each party to the controversy pursuant to Exchange Act Rule 14a
- --- -6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies: None
2. Aggregate number of securities to which transaction applies: None
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1) None
4. Proposed maximum aggregate value of transaction: None
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
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: None
2. Form, Schedule or Registration Statement No.: None
3. Filing Party: Not Applicable
4. Date Filed: Not Applicable
<PAGE>
MESA INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 17, 1995
Dallas, Texas
April 4, 1995
To the Stockholders of MESA Inc.:
Notice is hereby given that the Annual Meeting of the Stockholders of
MESA Inc. will be held at the Loews Anatole Hotel, 2201 Stemmons Freeway,
Dallas, Texas 75207, at 10:00 a.m. on Wednesday, May 17, 1995, for the
following purposes:
(1) To elect ten persons to serve on the Board of Directors of the
Company;
(2) To ratify the appointment of Arthur Andersen LLP as the
Company's independent public accountants for 1995; and
(3) To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 22, 1995, will
be entitled to notice of, and to vote at, the Annual Meeting or any
postponements or adjournments thereof.
Stockholders are cordially invited to attend the Annual Meeting in
person. Whether or not you plan to attend in person, please sign, date, and
promptly mail the enclosed proxy card for which a self-addressed, U.S.
postage-paid, return envelope is provided.
Stockholders are urged to read carefully the attached Proxy Statement
for additional information concerning the matters to be considered at the
Annual Meeting.
By order of the Board of Directors
/s/ William D. Ballew
----------------------------------
William D. Ballew
Controller
<PAGE>
MESA INC.
2600 Trammell Crow Center, 2001 Ross Avenue
Dallas, Texas 75201
PROXY STATEMENT
===============
ANNUAL MEETING OF STOCKHOLDERS
May 17, 1995
This Proxy Statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of MESA Inc. for
use at the Annual Meeting of Stockholders to be held at the Loews Anatole
Hotel, 2201 Stemmons Freeway, Dallas, Texas 75207, at 10:00 a.m. on
Wednesday, May 17, 1995, and at any postponements or adjournments thereof
(the "Annual Meeting"). The Annual Meeting is being held to consider and
act on the matters stated in the accompanying Notice. Unless the context
otherwise requires, references herein to "the Company" or "MESA" are to MESA
Inc. and its subsidiaries and predecessors viewed as a single entity.
This Proxy Statement and the enclosed form of proxy are first being
mailed to stockholders on or about April 7, 1995. Each proxy will be voted
in accordance with the specifications marked thereon. If no voting
specification is made, shares represented by proxies will be voted (i) FOR
the election of the ten nominees named herein as Directors of the Company
(subject to any cumulative voting as described below and on the proxy), (ii)
FOR the appointment of Arthur Andersen LLP as the Company's independent
public accountants for 1995, and (iii) in the discretion of the persons
named in the accompanying proxy card in connection with any other business
that may properly come before the Annual Meeting. A stockholder may revoke
his or her proxy by written notice of revocation received by The Corporation
Trust Company, the independent collection agent for the Annual Meeting, at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801,
any time before it is voted, by executing and delivering a later dated proxy
for the Annual Meeting to the independent collection agent, or by attending
the Annual Meeting and voting in person.
At the close of business on March 22, 1995, the record date for the
determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting (the "Record Date"), there were 64,050,009 shares of Common
Stock outstanding. Each share of Common Stock is entitled to one vote with
respect to the matters to be acted upon at the Annual Meeting, except with
respect to the election of directors. In accordance with the Texas Business
Corporation Act, cumulative voting is allowed in the election of directors
at the Annual Meeting only if a stockholder who intends to cumulate his or
her votes gives written notice of such intention to the Secretary of the
Company (at the Company's address above) on or before the day preceding the
date of the Annual Meeting. All stockholders may cumulate their votes if
any stockholder gives the written notice provided for under the Texas
Business Corporation Act. Delivery of a signed and dated proxy card
specifying cumulative votes to the independent collection agent will not
constitute the notice to the Company required under the Texas Business
Corporation Act to allow cumulative voting. Under cumulative voting, each
stockholder would be entitled to cast ten votes per share (one vote per
share multiplied by the number of positions on the Board of Directors to be
filled). Under cumulative voting, each stockholder could cumulate his or
her votes by giving one nominee a number of votes equal to the number of
positions on the Board of Directors to be filled (i.e., ten) multiplied by
the number of shares he or she is entitled to vote at the Annual Meeting, or
could distribute such number of votes on the same principle among any number
of candidates.
To the extent that a stockholder's notice of intent to cumulate votes
at the Annual Meeting is received by the Company, the Board of Directors is
also soliciting discretionary authority to cumulate votes in the election of
directors. In the event of cumulative voting, the persons named in the
accompanying proxy card will vote the shares covered by proxies received by
them with a view to causing the ten nominees named herein to be elected as
members of the Company's Board of Directors or, if election of all ten does
not appear possible, then the proxies will be voted with a view to causing
as many of such nominees to be elected as possible utilizing the cumulative
voting provision. Such persons may use cumulative voting in any fashion
they deem appropriate and may select, at their discretion, one or more of
the ten nominees named herein who will not receive their votes if it appears
unlikely to elect all ten as directors. A stockholder may, in the manner
set forth in the enclosed proxy card, instruct the proxyholders not to vote
that stockholder's shares for one or more of the named nominees.
In the event of cumulative voting, if a stockholder wishes to cumulate
his or her votes for the election of directors, such stockholder should
clearly indicate on the proxy card the number of votes such holder wishes to
cast for each nominee. However, by virtue of cumulative voting, the persons
named as proxies will have ten votes for each share held by each stockholder
granting them proxies (unless voting authority is withheld) and could likely
offset the instruction not to vote for one of the ten nominees or the
exercise of cumulative voting by the use of votes granted in other proxies.
The Company's Bylaws require the Board of Directors to designate an
independent third party not affiliated with the Company or with any other
third party soliciting proxies to collect, count, and hold all proxies and
ballots that identify stockholders. Pursuant to this provision, the Board
of Directors has designated The Corporation Trust Company as the independent
collection agent for the Annual Meeting. The Board of Directors believes
that the Bylaw provision requiring independent and confidential collection
and counting of proxies helps assure the integrity of the election process
and is in the best interests of the stockholders and the Company.
The affirmative vote of the holders of a majority of the shares of
Common Stock that are represented in person or by proxy and entitled to vote
at the Annual Meeting will be required to approve each proposal, except that
the election of the directors will be determined by a plurality vote of
shares voted at the Annual Meeting.
Under the Company's Articles of Incorporation and Bylaws, as well as
the Texas Business Corporation Act, the holders of a majority of shares of
Common Stock entitled to vote on a matter, represented in person or by
proxy, shall constitute a quorum as to that matter at the Annual Meeting.
In addition, if a quorum is present at the Annual Meeting, the stockholders
represented in person or by proxy at the Annual Meeting may conduct such
business as may be properly brought before the Annual Meeting, including the
two proposals described herein, until it is adjourned; and, the subsequent
withdrawal from the Annual Meeting of any stockholder or the refusal of any
stockholder represented in person or by proxy to vote shall not affect the
presence of a quorum at the Annual Meeting. Accordingly, at the Annual
Meeting, any proxy cards that include abstentions will be counted as being
present for purposes of determining the existence of a quorum for that
matter at the Annual Meeting. Proxy cards reflecting abstentions with
respect to a matter other than the election of directors will be so
reflected with respect to that matter in calculating stockholder votes, and
will therefore have the same effect as votes "against." If a broker
indicates on the proxy card that it does not have discretionary authority as
to certain shares to vote on a particular matter (a "broker non-vote"),
those shares will be counted as present for purposes of determining the
existence of a quorum at the Annual Meeting for all matters; however, broker
non-votes will not be counted as having been cast with respect to any matter
and will therefore have no effect on any matter to be brought before the
meeting, including the election of directors.
The Board of Directors recommends a vote (i) FOR the election of ten
nominees named herein as the directors, and (ii) FOR the appointment of
Arthur Andersen LLP as the Company's independent public accountants for
1995.
Management does not intend to bring any matters before the Annual
Meeting other than those set forth in the Notice of Annual Meeting and does
not know of any other matters to be brought before the Annual Meeting by
others. The Bylaws of the Company require advance notice to the Company of
proposals by stockholders for action to be taken at the Annual Meeting and
of nominations by stockholders of persons for election to the Board of
Directors. If any other matter should properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy
to vote proxies in accordance with their judgment on such matters. The
proxy card, when properly executed, will be voted as specified herein by the
stockholder. If no specification is made, this proxy will be voted for
proposals (i) and (ii). With regard to the election of the Board of
Directors, if there is cumulative voting, votes will be distributed as
instructed or in the discretion of the proxy holders as described in this
Proxy Statement and the proxy card.
The Company has retained Morrow & Co., Inc. to solicit proxies in the
enclosed form and will pay such firm a fee of approximately $15,000 plus
reasonable expenses for so acting. In addition, certain officers,
representatives, and regular employees of the Company may also contact
stockholders by telephone, telegram, or personal interview. The Company
will reimburse brokers and other custodians or nominees for their reasonable
expenses incurred in forwarding the solicitation material to beneficial
owners of Common Stock. The entire cost of this solicitation will be borne
by the Company.
1. ELECTION OF DIRECTORS
=====================
At the Annual Meeting, ten persons will be elected to the Board of
Directors to hold office until the next Annual Meeting of stockholders and
until their respective successors have been duly elected and qualified. The
Company does not contemplate that any of the nominees will become
unavailable for any reason, but if that should occur before the Annual
Meeting, the persons named as proxies in the accompanying proxy card will
vote the shares represented by the proxies for another nominee or nominees
to be selected by management of the Company.
<PAGE>
The following table sets forth with respect to each nominee (i) his name
and age, (ii) the period during which he has served as a director, if
currently a director, and (iii) his principal occupation over the last five
years (including other directorships and business experience):
Business Experience
Name and Age Over Past Five Years
------------------------ ------------------------------
Boone Pickens, age 66.................. January 1992-Present, Chairman
of the Board of Directors and
Chief Executive Officer of the
Company; October 1985-December
1991, General Partner of Mesa
Limited Partnership (prede-
cessor to the Company and
hereinafter referred to as the
"Partnership"); 1964-January
1987, Chairman of the Board,
President, and founder of Mesa
Petroleum Co. (predecessor to
the Partnership, hereinafter
referred to as "Original
Mesa").
Paul W. Cain, age 56................... January 1992-Present, Director,
President, and Chief Operating
Officer of the Company; August
1986-December 1991, President,
Chief Operating Officer of
the Partnership; Director of
Bicoastal Corporation.
John L. Cox, age 70.................... August 1994-Present, Director
of the Company; independent oil
and gas producer for more than
the last five years.
John S. Herrington, age 55............. January 1992-Present, Director
of the Company; December 1991
-Present, personal investments
and real estate activities; May
1990-November 1991, Chairman of
the Board of Harcourt Brace
Jovanovich, Inc. (publishing);
May 1989-May 1990, Director of
Harcourt Brace Jovanovich,
Inc.; February 1985-January
1989, Secretary of the
Department of Energy of the
United States.
Wales H. Madden, Jr., age 67........... January 1992-Present, Director
of the Company; December 1985
-December 1991, Member of the
Advisory Committee of the
Partnership; 1964-January 1987,
Director of Original Mesa; Self
-employed attorney and
businessman for more than the
last five years; Director of
Boatmen's First National Bank
of Amarillo.
Fayez S. Sarofim, age 66............... January 1992-Present, Director
of the Company; Chairman of the
Board and President of Fayez
Sarofim & Co. (investment
adviser) for more than the last
five years; Director of
Teledyne, Inc., Unitrin, Inc.,
Argonaut Group, Inc., and
Imperial Holly Corporation.
Robert L. Stillwell, age 58............ January 1992-Present, Director
of the Company; December 1985
-December 1991, Member of the
Advisory Committee of the Part-
nership; 1969-January 1987,
Director of Original Mesa;
Partner in the law firm of
Baker & Botts, L.L.P., for more
than the last five years.
J.R. Walsh, Jr., age 70................ January 1992-Present, Director
of the Company; December 1985
-December 1991, Member of the
Advisory Committee of the
Partnership; 1982-January 1987,
Director of Original Mesa;
President and Chairman of the
Board of United Mud Service
Company (oil and gas service
company) for more than the last
five years.
David H. Batchelder, age 45............ Director nominee; 1984-January
1987, Director of Original
Mesa; February 1987-March 1988,
President and Director of BTC
Partners Inc. (financial
consultant to the Company); May
1988-Present, President,
Secretary, and Director of
Batchelder & Partners, Inc. (an
investment advisory and
consulting firm)and President,
Secretary, and Director of
Batchelder Co. (the general
partner of DHB Partners, L.P.,
an investor in acquisition
partnerships); Director of
Kasler Holding Company,
MacFrugal's Bargains and
Closeouts, Inc. and Allwaste,
Inc.
Dorn Parkinson, age 48................. Director nominee; April 1986-
Present, President of
Washington Corporations
(principal businesses of
Washington Corporations and its
affiliates include rail
transport, mining, ship
berthing, environmental
remediation, interstate
trucking, and the repair and
sale of machinery and
equipment); January, 1995-
Present, Chairman of the Board
of Kasler Holding Company
(heavy construction and
contract mining); July 1993-
October 1994, President
and Chief Operating Officer of
Kasler Holding Company;
Director of Kasler Holding
Company.
The Board of Directors recommends a vote FOR the Nominees named above.
- ----------------------------------------------------------------------
Agreement with Dennis Washington
- --------------------------------
In December 1994, Dennis R. Washington, an individual residing in
Missoula, Montana, notified the Company and federal antitrust authorities
that he had a present good faith intention to acquire more than $15 million
of the outstanding Common Stock of the Company and, depending on market
conditions, might acquire more of such shares. His notification under the
Hart-Scott-Rodino Antitrust Improvements Act designated the 25% acquisition
threshold, which had the effect of permitting him, following the applicable
waiting period, to acquire up to 49.9% of the outstanding shares without
further notification under such Act. The authorities granted early
termination of the waiting period later in December.
By letter dated February 17, 1995, pursuant to a provision of the
Company's bylaws, Mr. Washington notified the Company of his wish to
nominate three candidates for election as directors at the Annual Meeting
and his intent to cumulate votes in the election of directors at the Annual
Meeting. Mr. Washington's letter stated that he beneficially owned
2,854,900 shares of Common Stock (which constitute approximately 4.5% of the
outstanding shares).
After discussions with Mr. Washington's representatives, the Company
concluded that the best interests of the Company and its stockholders would
be served by the Board's nominating two of Mr. Washington's representatives
as candidates for election as directors. Accordingly, on April 1, 1995, the
Company and Mr. Washington entered into an agreement (the "Agreement")
pursuant to which the parties agreed that the slate of nominees to be
proposed by the Board of Directors for election at the Annual Meeting would
be that set forth under "Election of Directors," and that they would vote
and cause their affiliates to vote in favor of such nominees. The Company
and Mr. Washington further agreed that one of the nominees designated by Mr.
Washington would serve on the Board's Compensation and Stock Option
Committees, and the other would serve on its Audit Committee (one would also
serve on any other committee of the Board of Directors that may exist from
time to time, subject to the reasonable eligibility requirements of such
committee). Mr. Washington has designated David Batchelder and Dorn
Parkinson as his nominees to the Board of Directors.
Under the Agreement, Mr. Washington withdrew the notifications made in
his February 17 letter and agreed not to engage in any solicitation of
proxies at the Annual Meeting. If Mr. Washington and his affiliates
beneficially own less than 1,300,000 shares of Common Stock at any time
after the date of the Agreement, Mr. Washington has further agreed not to
nominate candidates for election as directors or engage in any proxy
solicitation at the Company's annual meeting of stockholders to be held in
1996. At the option of the Company, if at any time Mr. Washington and his
affiliates beneficially own less than 2,800,000 shares of Common Stock, one
nominee designated by Mr. Washington shall resign from the Board of
Directors, and if at any time Mr. Washington and his affiliates beneficially
own less than 1,300,000 shares of Common Stock, the remaining Washington
designee also shall resign.
In addition, as part of the Agreement, each party released the other
party (and such other party's affiliates, associates, and representatives)
from any claims arising prior to the date of the Agreement that he or it may
have with respect to Mr. Washington's investment in the Company, any actions
taken by the Company in response thereto, the execution and delivery of the
Agreement or the business and affairs of the Company, other than a breach of
the Agreement.
Director Compensation, Certain Relationships, and Committees
- ------------------------------------------------------------
Each director of the Company serving during 1994 who was not also an
employee of the Company or its subsidiaries received compensation of $20,000
in 1994. Directors who are also employees of the Company receive no
remuneration for their services as directors.
Mr. Sarofim, a director and member of the Compensation and Stock Option
Committees, is Chairman of the Board, President, and owner of a majority of
the outstanding capital stock of Fayez Sarofim & Co., which acts as an
investment adviser to certain employee benefit plans of the Company. During
the year ended December 31, 1994, Fayez Sarofim & Co. received fees, paid by
the employee benefit plans, of $135,442 for such services and has been
retained to provide such services in 1995.
Mr. Stillwell, a director and member of the Compensation and Stock
Option Committees, is a partner in the law firm of Baker & Botts, L.L.P.
The Company retained Baker & Botts, L.L.P. and incurred legal fees for such
services in 1994. Baker & Botts, L.L.P. has been retained to provide legal
services in 1995.
Mr. Walsh, a director and member of the Compensation and Stock Option
Committees, is President and Chairman of the Board of United Mud Service
Company. The Company paid United Mud Service Company $82,428 for drilling
mud and services during the year ended December 31, 1994, and expects to use
United Mud Service Company for such products and services in 1995.
The Board of Directors of the Company held five meetings in 1994. Each
director attended at least 75 percent of the meetings of the Board of
Directors and committees of the Board on which he serves. The Board of
Directors has the following standing committees: the Audit Committee, the
Compensation Committee, and the Stock Option Committee. It does not have a
Nominating Committee.
The Audit Committee is composed of Messrs. Herrington, Madden, and
Walsh. Its primary functions are (i) the recommendation of independent
public accountants, (ii) the review of the independence of the independent
public accountants, audit engagement, and other professional services of the
independent public accountants, and (iii) the provision for the availability
to the independent public accountants of all aspects of the Company's
accounting practices and procedures. The Audit Committee held two meetings
in 1994.
The Compensation Committee is composed of Messrs. Sarofim, Stillwell,
and Walsh. The Compensation Committee held one meeting in 1994. The Stock
Option Committee, which administers the 1991 Stock Option Plan, is also
composed of Messrs. Sarofim, Stillwell, and Walsh. The Stock Option
Committee held one meeting in 1994.
Pursuant to the Agreement with Mr. Washington, one of Mr. Washington's
designees will be appointed to serve on each such committee after the Annual
Meeting.
2. APPROVAL OF SELECTION OF INDEPENDENT ACCOUNTANTS
================================================
The Board of Directors has appointed the firm of Arthur Andersen LLP as
the Company's independent public accountants for 1995. Arthur Andersen LLP
has been the Company's independent public accountants since 1964.
A representative of Arthur Andersen LLP will be available at the Annual
Meeting and will have the opportunity to make a statement if he or she
desires to do so and to respond to appropriate questions.
The Board of Directors recommends a vote FOR the appointment of Arthur
Andersen LLP as the Company's independent public accountants.
- ---------------------------------------------------------------------------
MANAGEMENT OF THE COMPANY
=========================
The following table sets forth the name, age, and five-year employment
history of each Executive Officer of the Company:
Business Experience
Name and Age Over Past Five Years
------------------------ ------------------------------
Boone Pickens, age 66.................. January 1992-Present, Chairman
of the Board of Directors and
Chief Executive Officer of the
Company; October 1985-December
1991, General Partner of the
Partnership; 1964-January 1987,
Chairman of the Board,
President, and founder of
Original Mesa.
Paul W. Cain, age 56................... January 1992-Present, Director,
President, and Chief Operating
Officer of the Company; August
1986-December 1991, President,
Chief Operating Officer of
the Partnership; Director of
Bicoastal Corporation.
Dennis E. Fagerstone, age 46........... January 1992-Present, Vice
President-Exploration and
Production of the Company; May
1991-December 1991, Vice
President-Exploration and
Production of the Partnership;
June 1988-May 1991, Vice
President-Operations of the
Partnership.
Stephen K. Gardner, age 35............. June 1994-Present, Vice
President, Chief Financial
Officer of the Company; January
1992-May 1994, Vice President
of BTC Partners Inc. (financial
consultant to the Company); May
1988-December 1991, Financial
Analyst of BTC Partners, Inc.;
June 1987-April 1988, Financial
Analyst of the Partnership;
Director of Bicoastal
Corporation.
Andrew J. Littlefair, age 34........... January 1992-Present, Vice
President-Public Affairs of the
Company; August 1987-December
1991, Assistant to the General
Partner of the Partnership;
January 1984-August 1987, Staff
Assistant to the President of
the United States, Washington,
D.C.
William D. Ballew, age 36.............. January 1992-Present, Con-
troller of the Company; May
1991-December 1991, Controller
of the Partnership; January
1991-May 1991, Manager-
Accounting of the Partnership;
December 1988-December 1990,
Assistant to the Controller of
the Partnership; July 1986-
December 1988, Audit Manager
for Price Waterhouse, Dallas,
Texas.
<PAGE>
EXECUTIVE COMPENSATION
======================
Compensation of Executive Officers
- ----------------------------------
The table set forth below contains certain information regarding
compensation earned by, awarded to, or paid to the Chief Executive Officer
and the other four most highly compensated executive officers of the Company
for services rendered to the Company during the years 1992 through 1994.
Summary Compensation Table
--------------------------
Annual Compensation
----------------------------------
Other Annual
Name and Principal Position Year Salary Bonus Compensation(2)
- -------------------------------- ---- -------- -------- ------------
Boone Pickens, 1994 $675,000 $175,000 $ --
Chairman of the Board of 1993 675,000 0 --
Directors and Chief Executive 1992 960,000 0(1) --
Officer
Paul W. Cain, 1994 400,020 150,000 --
President, Chief Operating 1993 400,020 225,000 --
Officer 1992 400,020 0(1) --
Dennis E. Fagerstone, 1994 199,980 100,000 --
Vice President-Exploration 1993 199,980 75,000 --
and Production 1992 199,980 106,323(1) --
Andrew J. Littlefair, 1994 115,980 100,000 --
Vice President-Public Affairs 1993 115,980 75,000 --
1992 109,980 92,330(1) --
William D. Ballew, 1994 121,230 40,000 --
Controller 1993 115,980 50,000 --
1992 109,980 66,512(1) --
Long-Term
Compensation
Awards-Number
of Shares
Underlying All Other
Name and Principal Position Year Options/SARs Compensation(3)
- -------------------------------- ---- --------------- ---------------
Boone Pickens, 1994 200,000 $1,094,500(4)
Chairman of the Board of 1993 275,000 114,750(5)
Directors and Chief Executive 1992 800,000 1,047,707(6)
Officer
Paul W. Cain, 1994 150,000 93,503(7)
President, Chief Operating 1993 100,000 106,253(8)
Officer 1992 150,000 273,040(9)
Dennis E. Fagerstone, 1994 85,000 50,997(10)
Vice President-Exploration 1993 10,000 46,747(11)
and Production 1992 50,000 72,740(12)
Andrew J. Littlefair, 1994 85,000 36,717(13)
Vice President-Public Affairs 1993 25,000 32,467(14)
1992 30,000 47,583(15)
William D. Ballew, 1994 45,000 27,409(16)
Controller 1993 10,000 28,217(17)
1992 30,000 43,807(18)
(1) Bonuses paid to the executive officers of the Company in 1992 include
bonus payments with respect to performance in 1992 as well as the
unpaid portion of deferred bonuses awarded in 1990 and 1991. The
following amounts were paid to the executive officers of the Company
for services rendered during 1992: $0 to Mr. Pickens; $0 to Mr. Cain;
$28,000 to Mr. Fagerstone; $32,000 to Mr. Littlefair; and $21,000 to
Mr. Ballew. On July 1, 1992, the Company cancelled the key employee
life insurance policies for certain of its officers and other employees
and collected the aggregate cash surrender value of $1,210,859. At the
same time, the Company accelerated the deferred portion of bonuses
awarded in previous years to such officers and employees. The balance
of the 1992 bonus amounts represents the acceleration of the deferred
portion of bonuses for prior years that were paid to each individual in
the above table in connection with the cancellation of employee life
insurance policies. Bonuses paid to the individuals named in the table
above for 1992 (but not for 1993 or 1994) were paid pursuant to a bonus
plan under which the Company awarded bonuses by reference to the
achievement of certain established objectives by such individuals for
the bonus plan year, although under such plan awards could be made even
if all such objectives were not fully achieved. Under such plan,
awards generally vested and were paid in three annual installments.
Bonuses paid in 1993 and 1994 were awarded based upon the decisions of
the Company's Compensation Committee. See "Compensation Committee
Report" below.
(2) Apart from the compensation set forth in the summary compensation table
and under the plans and pursuant to the transactions described below,
other compensation paid for services during the years ended December
31, 1994, 1993, and 1992, respectively, to each individual named in the
summary compensation table aggregated less than 10% of the total salary
and bonus reported for such individual in the summary compensation
table, or $50,000, if lower.
(3) Except as reflected in other notes, "All Other Compensation" consists
of the following items. First, the Company maintains an Employees
Premium Plan and a Profit Sharing Plan, both of which are retirement
plans (the "Retirement Plans"), for all employees (see separate
discussion below). Total employer contributions to the Retirement
Plans for the account of a participant in any calendar year are limited
as specified by the Internal Revenue Code (the "Code") and the
Retirement Plans. See "Limitation on Contributions to Benefit Plans"
below. The maximum annual amount of employer contributions to the
Retirement Plans totaled $25,500 in 1994 and $30,000 in 1993 and 1992.
The Company contributed 17% of each employee's total 1994 compensation
to the Retirement Plans. Second, to the extent that 17% of an
employee's total compensation exceeded $25,500 in 1994 (all employees
with total compensation in excess of $150,000) and $30,000 in 1993 and
1992 (all employees with total compensation in excess of $176,470), the
Company, as a matter of policy, paid the excess amount in cash to such
employee. Third, prior to July 1, 1992, the Company maintained a key
employee life insurance program (see separate discussion below) for
each executive officer and certain other key employees for which the
Company paid a major portion of the premiums. Fourth, Mr. Pickens was
granted a bonus, payment of which has been deferred until his
retirement and subject to his continued employment (except in certain
events) through December 31, 1995, with respect to the Company's 1994
commodities and securities investment activities, which were managed by
Mr. Pickens. See "Compensation Committee Report" below.
(4) Includes the following: a $25,500 Retirement Plans contribution; a
$119,000 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above; a $950,000 bonus
payment which has been deferred until Mr. Pickens' retirement and
subject to his continued employment (except in certain events) through
December 31, 1995, with respect to the Company's 1994 commodities and
securities investment activities managed by him. See "Compensation
Committee Report" below.
(5) Includes the following: a $30,000 Retirement Plans contribution;
an $84,750 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(6) Includes the following: $114,244 of life insurance premiums; a $30,000
Retirement Plans contribution; a $133,200 payment for Retirement
Plans contribution in excess of the contribution limitation as
described in Note 3 above. Also includes cancellation of the previous
deferred compensation plan for which $3,590,345 had been previously
expensed and accrued and which was replaced by a split-dollar life
insurance program that was funded in 1992 at a premium cost of
$4,360,608. The net amount attributable to 1992 is reflected in the
summary compensation table.
(7) Includes the following: a $25,500 Retirement Plans contribution; a
$68,003 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(8) Includes the following: a $30,000 Retirement Plans contribution; a
$76,253 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(9) Includes the following: $28,266 of life insurance premiums; a $30,000
Retirement Plans contribution; a $38,003 payment for a Retirement
Plans contribution in excess of the contribution limitation as
described in Note 3 above. Also includes cancellation of the previous
deferred compensation plan for which $323,229 had been previously
expensed and accrued and which was replaced by a split-dollar life
insurance program that was funded in 1992 at a premium cost of
$500,000. The net amount attributable to 1992 is reflected in the
summary compensation table.
(10) Includes the following: a $25,500 Retirement Plans contribution; a
$25,497 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(11) Includes the following: a $30,000 Retirement Plans contribution; a
$16,747 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(12) Includes the following: $6,840 of life insurance premiums; a $30,000
Retirement Plans contribution; a $35,900 payment for a Retirement
Plans contribution in excess of the contribution limitation as
described in Note 3 above.
(13) Includes the following: a $25,500 Retirement Plans contribution; an
$11,217 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(14) Includes the following: a $30,000 Retirement Plans contribution; a
$2,467 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(15) Includes the following: $2,187 of life insurance premiums; a $30,000
Retirement Plans contribution; a $15,396 payment for a Retirement
Plans contribution in excess of the contribution limitation as
described in Note 3 above.
(16) Includes the following: a $25,500 Retirement Plans contribution; a
$1,909 payment for a Retirement Plans contribution in excess of the
contribution limitation as described in Note 3 above.
(17) Includes a $28,217 Retirement Plans contribution.
(18) Includes the following: $3,360 of life insurance premiums; a $30,000
Retirement Plans contribution; a $10,447 payment for a Retirement
Plans contribution in excess of the contribution limitation as
described in Note 3 above.
Employees Premium and Profit Sharing Plans
- ------------------------------------------
MESA maintains the Retirement Plans for the benefit of its employees.
Each year, the Company is required to contribute to the Employees Premium
Plan 5% of the total compensation (as defined in the plan) paid to
participants and may also contribute up to 12% of total compensation (as
defined) to the Profit Sharing Plan. Participants become 30% vested in
their account balances in the Retirement Plans after three years of service
and 40% vested after four years of service. Participants become vested an
additional 20% for each additional year of service through year seven.
Effective December 31, 1991, all participants were fully vested in
their account balances in the Retirement Plans as a result of certain
property dispositions consummated in 1990 and 1991. Participants shall
remain fully vested in their 1991 balances, but contributions in 1992 and
later years under the Retirement Plans are subject to the vesting schedule
described above.
Prior years of service with the Company's predecessors are counted in
the vesting schedule. Amounts accumulated and vested are distributable only
under certain circumstances, including termination of the Retirement Plans.
Limitation on Contributions to Benefit Plans
- --------------------------------------------
Total employer contributions to the Retirement Plans for the account of
a participant in any calendar year are limited to the lesser of what is
specified by the Code or by the Retirement Plans. The Code provides that
annual additions to a participant's account may not exceed the lesser of
$30,000 or 25% of the amount of the participant's annual compensation. The
Retirement Plans provide that aggregate annual additions to a participant's
account may not exceed 17% of eligible compensation as defined by the
Retirement Plans. The eligible compensation per the Code was limited to
$150,000 in 1994 and $228,000 in 1993 and 1992. The Company, in its
discretion, may determine to make cash payments of amounts attributable to
an employee's participation in the Retirement Plans to the extent such
amounts exceed the Code limitations. As a matter of general policy for
employees of the Company, the Company makes annual cash payments directly to
employees to the extent that the annual additions to the account of each
such employee pursuant to the Retirement Plans would exceed the Code
limitations.
1991 Stock Option Plan
- ----------------------
The 1991 Stock Option Plan (the "Option Plan") was approved by
stockholders in 1991 and amended by stockholders in 1994. Its purpose is to
serve as an incentive to, and aid in the retention of, key executives and
other employees whose training, experience, and ability are considered
important to the operations and success of the Company. The Option Plan is
administered by the Stock Option Committee composed of non-employee
directors of the Company who meet the requirements of "disinterested person"
in Rule 16b-3 (c) (2) (i) of the Securities Exchange Act of 1934. Pursuant
to the Option Plan, the Stock Option Committee is given the authority to
designate plan participants, to determine the terms and provisions of
options granted thereunder, and to supervise the administration of the plan.
A total of 4,000,000 shares of Common Stock are currently subject to the
plan, of which options for 3,042,950 shares have been granted. At December
31, 1994, the following stock options were outstanding:
Number of
Options
---------
Granted.................................................... 3,042,950
Exercised.................................................. (62,720)
Forfeited.................................................. (53,770)
---------
Outstanding at December 31, 1994........................... 2,926,460
=========
Shares of Common Stock subject to an option are awarded at an exercise
price that is equivalent to at least 100% of the fair market value of the
Common Stock on the date the option is granted. The purchase price of the
shares as to which the option is exercised is payable in full at exercise in
cash or in shares of Common Stock previously held by the optionee for more
than six months, valued at their fair market value on the date of exercise.
Subject to Stock Option Committee approval and to certain legal limitations,
an optionee may pay all or any portion of the purchase price by electing to
have the Company withhold a number of shares of Common Stock having a fair
market value equal to the purchase price. Options granted under the Option
Plan include a limited right of relinquishment that permits an optionee, in
lieu of purchasing the entire number of shares subject to purchase
thereunder and subject to consent of the Stock Option Committee, to
relinquish all or part of the unexercised portion of an option, to the
extent exercisable, for cash and/or shares of Common Stock in an amount
representing the appreciation in market value of the shares subject to such
options over the exercise price thereof. In its discretion, the Stock
Option Committee may provide for the acceleration of any unvested
installments of outstanding options. The Board of Directors may amend,
alter, or discontinue the Option Plan, subject in certain cases to
stockholder approval.
The options granted and outstanding at December 31, 1994, have exercise
prices and vesting schedules as set forth in the following table:
Exercise Vesting Schedule
Number of Price Per --------------------------------------------
Options Share 30% 55% 80% 100%
- --------- --------- -------- -------- -------- --------
1,126,000 $ 6.8125 07/10/92 01/10/93 01/10/94 01/10/95
142,500 11.6875 04/02/93 10/02/93 10/02/94 10/02/95
107,960 5.8125 11/18/93 05/18/94 05/18/95 05/18/96
475,000 7.3750 05/10/94 11/10/94 11/10/95 11/10/96
75,000 6.1875 12/06/94 06/06/95 06/06/96 06/06/97
1,000,000 4.2500 06/01/95 12/01/95 12/01/96 12/01/97
Options granted to the Chief Executive Officer and the other four most
highly compensated executive officers of the Company during 1994 are as
follows:
Option/SAR Grants in Last Fiscal Year
-------------------------------------
Number of
Shares Percent of Total
Underlying Options/SARs Exercise
Options/SARs Granted to or Base
Name Granted (1) Employees in 1994 Price
- ------------------------ ------------ ----------------- ----------
Boone Pickens 200,000 18.60% $4.25
Paul W. Cain 150,000 13.95% 4.25
Dennis E. Fagerstone 85,000 7.91% 4.25
Andrew J. Littlefair 85,000 7.91% 4.25
William D. Ballew 45,000 4.19% 4.25
Potential Realized Value at
Assumed Annual Rates of
Stock Price Appreciation
Name Expiration Date For Option Term
- ------------------------ ----------------- -----------------------------
5% 10%
---------- ----------
Boone Pickens December 01, 2004 $534,560 $1,354,681
Paul W. Cain December 01, 2004 400,920 1,016,011
Dennis E. Fagerstone December 01, 2004 227,188 575,739
Andrew J. Littlefair December 01, 2004 227,188 575,739
William D. Ballew December 01, 2004 120,276 304,803
(1) Of the options listed in the above table, 30% will be vested and
exercisable beginning June 1, 1995; 55% will be vested and exercisable
beginning December 1, 1995; 80% will be vested and exercisable
beginning December 1, 1996; and 100% will be vested and exercisable
beginning December 1, 1997.
Options exercised in 1994, and the number and value of exercisable and
unexercisable options at December 31, 1994, for the Chief Executive Officer
and the other four most highly compensated executive officers of the Company
are as follows:
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
-----------------------------------------------------------------------
Year Ended December 31, 1994
----------------------------------------------
Number of Shares Acquired
Name on Exercise Value Realized
- ------------------------- ------------------------- --------------
Boone Pickens -- $ --
Paul W. Cain -- --
Dennis E. Fagerstone -- --
Andrew J. Littlefair -- --
William D. Ballew -- --
Value of Unexercised
Number of Shares Underlying In-the-Money
Unexercised Options/SARs at Options/SARs at
December 31, 1994 December 31, 1994
--------------------------- ------------------------
Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ----------- ------------- ----------- ------------
Boone Pickens 791,250 483,750 $ 0 $125,000
Paul W. Cain 175,000 225,000 0 93,750
Dennis E. Fagerstone 45,500 99,500 0 53,125
Andrew J. Littlefair 37,750 102,250 0 53,125
William D. Ballew 29,500 55,500 0 28,125
At December 31, 1994, the Company's Common Stock per share closed at
$4.875. The exercise price of the three grants of stock options reflected
in the aggregate in the above tables are $6.8125, $7.375, and $4.25,
respectively, per share. Thus, only outstanding options with an exercise
price of $4.25, none of which were exercisable at December 31, 1994, were
in-the-money at such date.
Other
- -----
There were no awards made under any long-term incentive plans from
January 1, 1994, through December 31, 1994, that require disclosure in the
Long-Term Incentive Plan Awards table. From January 1, 1994, through
December 31, 1994, no options or stock appreciation rights were repriced (as
defined in Item 402(i) of Regulation S-K of the Securities Act of 1933).
Furthermore, the Company does not have any employment contracts or
termination or change-in-control arrangements with the Chief Executive
Officer or the other four most highly compensated executive officers of the
Company that would require disclosure pursuant to Item 402(h) of Regulation
S-K.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
Mr. Sarofim, a director and member of the Compensation and Stock Option
Committees, is Chairman of the Board, President, and owner of a majority of
the outstanding capital stock of Fayez Sarofim & Co., which acts as an
investment adviser to certain employee benefit plans of the Company. During
the year ended December 31, 1994, Fayez Sarofim & Co. received fees, paid by
the employee benefit plans, of $135,442 for such services and has been
retained to provide such services in 1995.
Mr. Stillwell, a director and member of the Compensation and Stock
Option Committees, is a partner in the law firm of Baker & Botts, L.L.P.
The Company retained Baker & Botts, L.L.P. and incurred legal fees for such
services in 1994. Baker & Botts, L.L.P. has been retained to provide legal
services in 1995.
Mr. Walsh, a director and member of the Compensation and Stock Option
Committees, is President and Chairman of the Board of United Mud Service
Company. The Company paid United Mud Service Company $82,428 for drilling
mud and services during the year ended December 31, 1994, and expects to use
United Mud Service Company for such products and services in 1995.
Compensation Committee Report
- -----------------------------
The Company's Compensation Committee is composed of the three
non-employee directors named below. The Committee's decisions as to annual
base
salaries, bonuses, and stock option grants, if any, for Mr. Pickens,
Chairman and Chief Executive Officer, and the other executive officers of
the Company are based on the subjective judgment of the Committee as to (1)
a reasonable value to the Company of the services of Mr. Pickens and the
other officers in their respective capacities and for their respective
contributions; (2) a reasonable competitive market value of the services of
Mr. Pickens and the other officers in such capacities; (3) a reasonable
relationship to compensation levels of the chief executive and other
officers of other public companies, including those companies named in the
Company's "Peer Group" discussed under "Performance Graph" below; and (4)
the
recommendation of senior management as to compensation levels for all
officers other than Mr. Pickens. The Committee's decisions in this regard
are not based on any objective, required, or projected performance criteria
for the Company or its securities. Mr. Pickens' base salary and the 1994
salaries listed in the summary compensation table for the four other most
highly compensated executive officers are the result of such judgment. The
Committee made a similar judgment based on its assessment of the efforts and
contributions of individual officers during the year and on the above-listed
criteria with respect to 1994 current bonuses for Mr. Pickens and the other
officers (as listed in the summary compensation table), as well as stock
option grants to such persons. The deferred bonus for Mr. Pickens
represents the Committee's subjective judgment as to a reasonable value to
the Company of Mr. Pickens' contribution to the Company's commodities and
securities investment activities, including the hedging of natural gas
production, which are conducted by Mr. Pickens. These activities resulted
in gains to the Company of $17.3 million in 1994, consisting of a $7.6
million realized gain during 1994 and a $9.7 million unrealized gain at
December 31, 1994, which amount was realized in early 1995.
The Company intends to comply with Internal Revenue Service regulations
under Section 162(m) of the Code dealing with non-deductibility of executive
compensation in excess of one million dollars annually except under certain
permitted circumstances that deal generally with shareholder-approved
"performance-based compensation."
Submitted by the Compensation Committee:
Fayez S. Sarofim
Robert L. Stillwell
J. R. Walsh, Jr.
Credit Support of Common Unit Purchases
- ---------------------------------------
The Partnership provided credit support by acting as a co-maker on
certain loans made by commercial banks in prior years to certain employees,
including Mr. Fagerstone (but not including Mr. Pickens), the proceeds of
which were used to purchase common units of the Partnership in open market
transactions. In conjunction with the conversion of the Partnership to the
Company in December 1991 (the "Corporate Conversion"), the Company assumed
the credit support obligations. Mr. Fagerstone's largest outstanding
borrowing balance during 1994 was $113,731. At December 31, 1994, all such
loans had been repaid by the employees.
Common Stock Purchase Plan
- --------------------------
The Company has established a Common Stock purchase program whereby
employees can buy Common Stock through after-tax payroll deductions. All
full-time employees of the Company and its participating affiliates are
eligible to participate. The Company pays the brokerage fees for these open
market transactions.
Indemnification Arrangements
- ----------------------------
The Company's Bylaws provide for the indemnification of its executive
officers and directors, and the advancement to them of expenses in
connection with proceedings and claims, to the fullest extent permitted by
the Texas Business Corporation Act. The Company has also entered into
indemnification agreements with its executive officers and directors that
contractually provide for indemnification and expense advancement and
include related provisions meant to facilitate the indemnitees' receipt of
such benefits. In addition, the Company purchased customary directors' and
officers' liability insurance policies for its directors and officers. The
Bylaws and agreements with directors and officers also provide for
indemnification for amounts (i) in respect of the deductibles for such
insurance policies, (ii) that exceed the liability limits of such insurance
policies, and (iii) that would have been covered by prior insurance policies
of the Company or its predecessors. Such indemnification may be made even
though directors and officers would not otherwise be entitled to
indemnification under other provisions of the Bylaws or such agreements.
BTC Partners
- ------------
The Company had entered into an agreement with BTC Partners Inc.
("BTC"), a Delaware corporation, pursuant to which BTC provided certain
financial and advisory services to the Company. BTC regularly functioned as
part of the Company's management team with respect to financial and other
matters. Pursuant to the agreement, BTC received an annual retainer and, in
the discretion of the Company, was paid additional fees for services it
rendered in connection with financing transactions, debt restructuring
activities, acquisitions or dispositions of properties or assets, and other
transactions with respect to which BTC assisted the Company. Such amounts
were payable in respect of BTC's services to the Company in evaluating,
negotiating, and implementing such transactions. The agreement also
provided that the Company would provide BTC certain other benefits and
support services. The agreement was terminated in June 1994. Stephen K.
Gardner, the Company's Chief Financial Officer, was a Vice President and
shareholder of BTC prior to assuming his current position with the Company.
PERFORMANCE GRAPH
=================
The graph below compares the Company's cumulative total stockholder
return (the change in stock price plus dividend reinvestment) to the
Standard & Poor's 500 Index and an index derived from the performance of a
group of independent oil and gas producers similar to the Company (the "Peer
Group"), over the last five fiscal years. The Peer Group consists of
Anadarko Petroleum Corporation, Apache Corporation, Enron Oil & Gas Company,
Louisiana Land and Exploration Company, Maxus Energy Corporation, Noble
Affiliates, Inc., Oryx Energy Company, and Plains Petroleum Company. The
Peer Group was selected from companies of similar size or with similar
assets as the Company. MESA Inc.'s Common Stock began trading on the New
York Stock Exchange on January 2, 1992, upon completion of the Corporate
Conversion. Prior to that time, the common equity securities of the
Company's predecessor (the Partnership) also traded on such exchange. The
five-year cumulative total return for MESA shown on the graph below reflects
the trading prices of, and dividends paid with respect to, such securities
for the relevant time periods and is adjusted to give effect retroactively
to the one-for-five reverse stock split effected on December 31, 1991, in
connection with the Corporate Conversion.
Management believes the Company's stock is viewed as a leveraged
commodity investment. The Company's stock represents a substantial quantity
of equivalent natural gas reserves offset by a substantial amount of debt.
As a result, management believes that changes in natural gas prices have a
magnified effect on the trading price of the Company's stock. For the past
few years (particularly after the Partnership discontinued cash
distributions to unitholders in 1990), the value of the Company's stock
declined significantly. Management believes that the Company's stock will
continue to be significantly affected by actual and expected changes in
natural gas prices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
===============================================
MESA Inc. S&P 500 Index Peer Group Index
--------- ------------- ----------------
1990......................... $37 $ 97 $84
1991......................... 17 126 71
1992......................... 12 136 80
1993......................... 14 150 98
1994......................... 12 152 87
+* Total Return assumes dividends are reinvested.
+ Assumes $100 invested on December 31, 1989, in MESA Inc., S&P 500 Index,
and the Peer Group Index.
+ The Peer Group Index return was based on Common Stock. Each company's
return is weighted according to the respective company's stock market
capitalization.
CERTAIN TRANSACTIONS
====================
The Company permits Mr. Pickens and his affiliates to use MESA's
properties and assets such as equipment, computers, aircraft, and other
transportation equipment for noncompany purposes on terms that are not
disadvantageous to the Company; however, such terms may be more favorable to
Mr. Pickens than those otherwise available to him. Mr. Pickens and
affiliates were charged a total of $113,894 in 1994, $79,002 in 1993, and
$125,027 in 1992 for the use of these assets (principally use of aircraft).
MESA periodically conducts business meetings and events and hosts
customers and business associates at facilities owned by Mr. Pickens,
principally a ranch and hunting facility. MESA pays for the use of these
facilities at rates comparable to those charged for similar facilities owned
by third parties. MESA paid Mr. Pickens $127,500 in 1994, $157,000 in 1993,
and $149,750 in 1992 for the use of the facilities.
SECURITY OWNERSHIP OF PRINCIPAL OWNERS AND MANAGEMENT
=====================================================
Security Ownership of Management
- --------------------------------
The following table presents certain information as to the beneficial
ownership of the Company's Common Stock as of March 22, 1995, by the
directors, director nominees, and officers of the Company, individually and
as a group:
Number of
Shares of Percentage
Common of Common
Stock(1) Stock
---------- ----------
Directors and Director Nominees:
Paul W. Cain.............................. 215,139 *
John L. Cox............................... 1,133,500 1.8%
John S. Herrington........................ 10,000 *
Wales H. Madden, Jr. ..................... 22,000 *
Boone Pickens(2).......................... 4,885,376 7.5%
Fayez S. Sarofim.......................... 1,400,000 2.2%
Robert L. Stillwell....................... 26,500 *
J. R. Walsh, Jr.(3)....................... 75,620 *
David H. Batchelder(4).................... - *
Dorn Parkinson(4)(5)...................... - *
Officers:
Dennis E. Fagerstone...................... 55,500 *
Stephen K. Gardner........................ 31,229 *
Andrew J. Littlefair(6)................... 60,438 *
William D. Ballew......................... 37,603 *
Directors, Director Nominees, and Officers as a
group (14 persons)............................. 7,952,905 12.2%
* Less than 1.0%
(1) Includes shares issuable upon the exercise of options that are
exercisable within sixty days of March 22, 1995, as follows: 951,250
shares for Mr. Pickens; 205,000 for Mr. Cain; 55,500 for Mr.
Fagerstone; 15,000 for Mr. Gardner; 43,750 for Mr. Littlefair;
35,500 for Mr. Ballew; and 1,306,000 for all directors and officers as
a group.
(2) The above amount includes 7,545 shares of Common Stock owned by several
trusts for Mr. Pickens' children of which he is a trustee, and over
which shares he has sole voting and investment power, although he has
no economic interest therein. The above amounts exclude 2,798 shares
of Common Stock owned by Mrs. Pickens as her separate property, as to
which Mr. Pickens disclaims beneficial ownership and with respect to
which he does not have or share voting or investment power.
(3) Excludes 1,027 shares of Common Stock owned by Mrs. Walsh as her
separate property, as to which Mr. Walsh disclaims beneficial ownership
and with respect to which he does not have or share voting or
investment power.
(4) Messrs. Batchelder and Parkinson have been nominated for election to
the Board of Directors pursuant to an agreement with Dennis R.
Washington, a stockholder that beneficially owns 2,854,900 shares of
Common Stock (approximately 4.5% of the outstanding shares). See
"Agreement with Dennis Washington," for additional information.
(5) Excludes 3,800 shares of Common Stock owned by Mr. Parkinson's son as
his separate property, as to which Mr. Parkinson disclaims beneficial
ownership and with respect to which he does not have or share voting or
investment power.
(6) Excludes 1,125 shares of Common Stock owned by Mrs. Littlefair as her
separate property, as to which Mr. Littlefair disclaims beneficial
ownership and with respect to which he does not have or share voting or
investment power.
Certain Beneficial Owners
- -------------------------
The table below sets forth certain information as of March 22, 1995,
regarding each person or "group" (as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934) known by the Company to own
beneficially more than 5% of the Common Stock. Information is based on the
most recent Schedule 13D or 13G filed by such holder with the Securities and
Exchange Commission (the "SEC"), or other information provided by the holder
to the Company.
Amount and Nature of
Beneficial Ownership
-------------------------------
Number of Percentage
Name and Address of Shares of of Common
Beneficial Owner Common Stock Stock
------------------- ------------ ----------
Boone Pickens.......................... 4,885,376(1) 7.5%
2600 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
The Prudential Insurance
Company of America................... 5,798,214(2) 9.3%
Prudential Plaza
Newark, New Jersey 07102-3777
(1) See notes (1) and (2) to the table under "Security Ownership of Manage-
ment."
(2) The Schedule 13G filed with the SEC on February 7, 1995, by The
Prudential Insurance Company of America ("Prudential") states that as
of December 31, 1994, such firm has the sole power to vote or to direct
the vote and the sole power to dispose or to direct the disposition of
1,653,360 shares. Prudential has shared power to vote or to direct the
vote and shared power to dispose or to direct disposition of 4,144,854
shares. Furthermore, Prudential presently holds 168,593 shares of
Common Stock for the benefit of its general account. In addition,
Prudential may have direct or indirect voting and/or investment
discretion over 5,629,621 shares of Common Stock that are held for the
benefit of its clients by its separate accounts, externally managed
accounts, registered investment companies, subsidiaries, and/or other
affiliates.
OTHER MATTERS
=============
You are respectfully requested to sign, date, and return the
accompanying proxy card in the enclosed envelope at your earliest
convenience, whether or not you plan to attend the Annual Meeting in person.
If you desire a copy of the Company's Annual Report on Form 10-K, you
should send a written request to MESA Inc., Stockholder Services, 2600
Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, and a copy will
be provided to you without charge.
Any stockholder desiring to have a statement of the Company's 1994
political contributions should send a written request to MESA Inc.,
Stockholder Services, 2600 Trammell Crow Center, 2001 Ross Avenue, Dallas,
Texas 75201.
In September 1990 the Company and Mr. Pickens entered into a consent
decree to settle allegations by the SEC that the Company and Mr. Pickens had
violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 in
connection with a proposal made by the Company in February 1988 to acquire
Homestake Mining Company ("Homestake"). Under the terms of the settlement,
without admitting or denying any of the SEC's allegations, the Company and
Mr. Pickens consented to the entry of a judgment enjoining them from future
violations of such sections. The SEC's allegations related to the Company's
February 1988 press release announcing its offer to acquire Homestake and
its subsequent sales of Homestake shares. The Company deposited $2.3
million in a fund for disbursement to other persons who purchased Homestake
shares at the time of the 1988 offer.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC and the New York Stock
Exchange. Officers, directors, and holders of more than 10% of the
Company's
equity securities are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the past year, all filing requirements applicable to the
officers, directors, and greater than 10% beneficial owners of the Company
and its predecessor were complied with, except that one Form 4 filing by
John L. Cox did not include the total shares purchased in one month because
he mistakenly believed shares were purchased on December 1st rather than on
November 30th. Mr. Cox's Form 4 report for the following month, with
respect
to the Company, correctly reflected his holdings and was timely filed.
1996 Stockholder Proposals
- --------------------------
Proposals that stockholders of the Company intend to present for
inclusion in the Company's Proxy Statement and form of proxy with respect to
the 1996 Annual Meeting of Stockholders must be received by the Company at
its principal executive offices in Dallas, Texas, not later than December 7,
1995. In addition, the Bylaws generally require stockholders to give the
Company 80 days notice in advance of a meeting to present proposals (whether
or not such proposals are to be included in the Company's proxy material) or
to nominate directors, unless the meeting date is not publicly announced at
least 90 days in advance of such meeting, in which case notice must be
received within 10 days after the first public announcement of the date of
such meeting.
By order of the Board of Directors
/s/ Boone Pickens
----------------------------------
Dallas, Texas Boone Pickens
April 4, 1995 Chairman of the Board and
Chief Executive Officer
<PAGE>
PROXY CARD (Side one of card)
==========
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of MESA Inc.
on Wednesday, May 17, 1995. At this meeting I will personally review MESA's
performance and operating strategy and will field any questions you may have
about our company.
The meeting will begin at 10:00 a.m. at the Loews Anatole Hotel, 2201
Stemmons Freeway, Dallas, Texas. For your convenience, we are including
with this letter a map that will be useful in planning your activities
should you decide to attend this event.
After reviewing the enclosed material, please take a moment to sign,
date, and mark your vote on the proxy card below and return it in the
enclosed postage-paid envelope. While management is recommending a vote
"FOR" each of the issues outlined below and would appreciate your support,
we urge your careful review of the enclosed material so that you can make
your own determination on how to vote. We believe all stockholders should
have a voice in the company's operations, so we ask that you return the
proxy
card whether or not you plan to attend the meeting.
I look forward to seeing you on May 17th.
/s/ Boone Pickens
-------------------------
Boone Pickens
Chairman of the Board and
Chief Executive Officer
FOLD AND TEAR HERE FOLD AND TEAR HERE FOLD AND TEAR HERE
- ----------------------------------------------------------------------------
PROXY MESA INC. PROXY
Proxy Solicited by the Board of Directors
for the Annual Meeting of Stockholders
to be held May 17, 1995
The undersigned stockholder hereby appoints William D. Ballew and G. Michael
Prescott, jointly and severally, proxies, with full power of substitution,
to vote, as specified below, all shares of MESA Inc. (the "Company") that
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
the Company to be held at the Loews Anatole Hotel, 2201 Stemmons Freeway,
Dallas, Texas 75207, at 10:00 a.m. on Wednesday, May 17, 1995, or any
adjournment or postponement thereof (the "Meeting"), and directs said
proxies to vote as instructed on the matters set forth below and otherwise
at their discretion. Receipt of a copy of the Notice of said Meeting and
the accompanying Proxy Statement is hereby acknowledged. This proxy revokes
all prior proxies given by the undersigned.
Please sign EXACTLY as name(s) appears
hereon, and in signing as Attorney,
Administrator, Guardian, Trustee, or
Corporate Officer, please add your title
as such.
Signature
-----------------------------
Title
-----------------------------
Date
-----------------------------
PROXY CARD (Side two of card)
==========
MEETING LOCATION
(MAP INDICATING HOTEL LOCATION AND DIRECTION INSTRUCTIONS)
- ----------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all nominees identified in
Proposal 1 below and FOR Proposal 2.
============================================================================
Proposal 1. Election of Board of Directors.
- -----------
FOR all nominees listed below (including the use of cumulative
---- voting as described in the Company's Proxy Statement).
WITHHOLD VOTE from all nominees.
---- (To withhold authority to vote for any individual nominee,
print the nominee's name on the following line.)
--------------
NOMINEES: Boone Pickens, Paul W. Cain, John L. Cox, John S. Herrington,
Wales H. Madden, Jr., Fayez S. Sarofim, Robert L. Stillwell,
J. R. Walsh, Jr., David H. Batchelder, and Dorn Parkinson.
Proposal 2. Ratify the appointment of Arthur Andersen LLP as the Company's
- ----------- independent public accountants for 1995.
FOR AGAINST ABSTAIN
---- ---- ----
Proposal 3. In their discretion the proxies are authorized to vote for the
- ----------- election of such substitute nominee(s) for director(s) as such
proxies shall select if any nominee(s) named above become(s)
unable to serve and upon such other business as may properly
come before the Meeting and any adjournments or postponements
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. WITH RESPECT TO THE ELECTION OF THE BOARD OF DIRECTORS (PROPOSAL
1), WHERE NO VOTE IS SPECIFIED OR WHERE A VOTE FOR ALL NOMINEES IS MARKED,
THE VOTES REPRESENTED BY A PROXY WILL BE CAST, UNLESS CONTRARY INSTRUCTIONS
ARE GIVEN, TO ELECT THE NOMINEES NAMED ABOVE (OR, IN THE EVENT OF CUMULATIVE
VOTING, AT THE DISCRETION OF THE PROXIES NAMED HEREIN IN ORDER TO ELECT AS
MANY NOMINEES AS BELIEVED POSSIBLE UNDER THE THEN PREVAILING CIRCUMSTANCES;
UNLESS INDICATED TO THE CONTRARY, IF YOU WITHHOLD YOUR VOTE FOR A
NOMINEE(S), ALL OF YOUR CUMULATIVE VOTES WILL BE DISTRIBUTED AMONG THE
REMAINING NOMINEES AT THE DISCRETION OF THE PROXIES). WHERE NO VOTE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 2. THE INDIVIDUALS NAMED
HEREIN ARE AUTHORIZED TO VOTE IN THEIR DISCRETION ON ANY OTHER MATTERS THAT
PROPERLY COME BEFORE THE MEETING. DELIVERY OF A SIGNED AND DATED PROXY CARD
TO THE INDEPENDENT COLLECTION AGENT FOR THE ANNUAL MEETING WILL NOT
CONSTITUTE THE NOTICE TO THE COMPANY REQUIRED UNDER THE TEXAS BUSINESS
CORPORATION ACT TO ALLOW CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS.
