<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[x] Definitive Information Statement
CLAYTON WILLIAMS ENERGY, INC.
(Name of Registrant as Specified in its Charter)
CLAYTON WILLIAMS ENERGY, INC.
(Name of Person(s) Filing Information Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(iii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies.
___________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
___________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________
(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:
______________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________
3) Filing Party:
______________________________________________
4) Date Filed:
______________________________________________
<PAGE>
CLAYTON WILLIAMS ENERGY, INC.
SIX DESTA DRIVE, SUITE 3000
MIDLAND, TEXAS 79705
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
This Information Statement is being mailed to stockholders of Clayton
Williams Energy, Inc. (the "Company") on or about June 20, 1996, in connection
with the action taken with respect to the 1993 Stock Compensation Plan of
Clayton Williams Energy, Inc. (the "Plan") by written consent of the holders of
more than a majority of shares of the Company's common stock, $.10 par value
(the "Common Stock") entitled to vote on such matters.
Stockholders of record at the close of business on June 17, 1996, are
entitled to receive this Information Statement. At the close of business on
such date, the Company had 7,468,113 shares of Common Stock outstanding, each
share being entitled to one vote. The action taken required the approval of at
least a majority of the shares outstanding and entitled to vote on such matters,
and such approval was obtained by the written consent of Clayton Williams
Partnership, Ltd. and CWPLCO, Inc., which own, in the aggregate, 3,772,009
shares of Common Stock, or 50.5% of the outstanding shares of Common Stock. See
"Information Concerning Security Ownership".
INFORMATION CONCERNING SECURITY OWNERSHIP
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or dispose of shares of the Company, either alone or jointly
with others, are deemed to be beneficial owners of such shares. The following
table sets forth certain information regarding the beneficial ownership of
Common Stock as of June 10, 1996, by (i) each person who is the beneficial owner
of 5% or more of the outstanding Common Stock (based upon copies of all Schedule
13Ds and 13Gs provided to the Company), (ii) each Director of the Company, (iii)
each executive officer named in the Summary Compensation Table and (iv) all
Officers and Directors of the Company as a group. Because the voting or
dispositive power of certain shares listed in the following table is shared, the
same securities in such cases are listed opposite more than one name in the
table and the sharing of voting or dispositive power is described in the
referenced footnote. The total number of shares of Common Stock of the Company
listed below for directors and executive officers as a group eliminates such
duplication. Unless otherwise noted, the persons and entities named below have
sole voting and investment power with respect to the shares listed opposite each
of their names.
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name Beneficial Ownership of Class
- ---- -------------------- --------
<S> <C> <C>
Clayton Williams Partnership, Ltd.(1) 3,772,009 50.5%
CWPLCO, Inc.(1) 3,772,009 50.5%
Clayton W. Williams, Jr.(1) 4,044,953(2) 54.1%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, WI 53202 1,139,388(3) 15.2%
Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010 556,168 7.5%
State Street Research & Management Company
One Financial Center, 30th Floor
Boston, MA 02111-2690 528,412(4) 7.1%
FMR Corp
82 Devonshire Street
Boston MA 02109 462,172 6.2%
L. Paul Latham 9,406(5) *
Mel G. Riggs 9,036(6) *
Stanley S. Beard 11,073(7) *
William P. Clements 9,368(7) *
Robert L. Parker 11,612(7) *
T. Mark Tisdale 5,130(8) *
All Officers and Directors as a group (10 persons) 4,117,247(9) 54.8%
</TABLE>
_______________________________
* Less than 1% of the shares outstanding.
(1) The mailing address of Clayton Williams Partnership, Ltd., CWPLCO,
Inc. and Mr. Williams is Six Desta Drive, Suite 3000, Midland, Texas
79705. Clayton Williams Partnership, Ltd. and CWPLCO, Inc. are
referred to collectively herein as the "Affiliated Holders." CWPLCO,
Inc. is the sole general partner of Clayton Williams Partnership, Ltd.
Mr. Williams shares voting and investment power with respect to the
shares owned by the Affiliated Holders.
(2) Includes (a) an aggregate of 3,772,009 shares owned of record by the
Affiliated Holders beneficially owned by Mr. Williams due to Mr.
Williams' control of the Affiliated Holders, (b) 1,878 shares owned by
Mr. Williams' spouse, (c) 588 shares owned by an estate administered
by Mr. Williams' spouse, (d) 192,247 shares owned directly by Mr.
Williams (including approximately 4,679 shares held in the Company's
401(k) Plan & Trust over which Mr. Williams exercises investment
control), (e) 12,594 shares owned by three of Mr. Williams' children
residing with him, (f) 49,434 shares in Trusts of which Mr. Williams
is
2
<PAGE>
the Trustee and (g) the right to acquire beneficial ownership through
presently exercisable options to purchase 16,203 shares of Common
Stock granted under the Plan at an option price of $2.375 per share.
See "Executive Compensation."
(3) Represents shares owned by clients of Heartland Advisors, Inc.
(4) Represents shares owned by clients of State Street Research &
Management Company.
(5) Includes (a) 2,895 shares owned directly by Mr. Latham (including 212
shares held in the Company's 401(k) Plan & Trust over which Mr. Latham
exercises investment control) and (b) the right to acquire beneficial
ownership through presently exercisable options to purchase 6,511
shares of Common Stock granted under the Plan at an option price of
$2.375 per share.
(6) Includes (a) 2,852 shares owned directly by Mr. Riggs (including 162
shares held in the Company's 401(k) Plan & Trust over which Mr. Riggs
exercises investment control), (b) 1,382 shares over which Mr. Riggs
exercises control under a Power of Attorney and (c) the right to
acquire beneficial ownership through presently exercisable options to
purchase 4,802 shares of Common Stock granted under the Plan at an
option price of $2.375 per share.
(7) Includes, in the case of each of Messrs. Beard, Clements and Parker,
the right to acquire beneficial ownership through presently
exercisable options to purchase (i) 1,000 shares each of Common Stock
granted under the Outside Directors Stock Option Plan at an option
price of $15.75 per share, (ii) 1,000 shares each of Common Stock
granted under the Outside Directors Stock Option Plan at an option
price of $7.25 per share, (iii) 1,000 shares each of Common Stock
granted under the Outside Directors Stock Option Plan at an option
price of $5.50 per share and (iv) 1,000 shares each of Common Stock
granted under the Outside Directors Stock Option Plan at an option
price of $3.25 per share.
(8) Includes (a) 3,030 shares owned directly by Mr. Tisdale (including
2,271 shares held in the Company's 401(k) Plan & Trust over which Mr.
Tisdale exercises investment control) and (b) the right to acquire
beneficial ownership through presently exercisable options to purchase
2,100 shares of Common Stock granted under the Plan at an option price
of $2.375 per share.
(9) Includes all rights of directors and executive officers to acquire
beneficial ownership through presently exercisable options to purchase
shares of Common Stock granted under the Outside Directors Stock
Option Plan and the Plan.
EXECUTIVE COMPENSATION
The following table shows the total compensation received for the last
three calendar years received by the Company's Chief Executive Officer and the
other executive officers of the Company whose annual compensation exceeded
$100,000 in 1995.
3
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compen-
sation
Annual Compensation Awards
------------------- ---------
Securities All Other
Underlying Compen-
Name and Principal Options/ sation
Position Year Salary($) Bonus($) SARs/(#)(1)(2) ($)(3)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Clayton W. Williams, Jr.
Chairman of the Board, 1995 $396,100 $11,003 32,407 $ 5,653
President and Chief 1994 407,750 11,003 32,407 3,852
Executive Officer(4) 1993 460,666 12,944 69,709 6,248
L. Paul Latham, Executive 1995 $159,900 $11,942 13,022 $34,919
Vice President and Chief 1994 159,750 4,442 13,022 39,087
Operating Officer 1993 142,314 4,750 26,489 69,653
Mel G. Riggs, Senior Vice 1995 $118,752 $10,799 9,605 $ 1,695
President and Chief 1994 117,709 3,299 9,605 1,360
Financial Officer 1993 104,207 3,472 19,364 1,562
T. Mark Tisdale 1995 $ 92,680 $11,074 4,200 $ 1,465
Vice President and 1994 89,976 2,574 4,200 1,026
General Counsel 1993 89,180 2,574 5,474 1,159
__________________
</TABLE>
(1) All amounts shown represent the number of option shares granted under
the Plan, a description of which is under "Amendment to 1993 Stock
Compensation Plan - Description of Plan."
(2) Messrs. Williams, Latham, Riggs and Tisdale each exchanged the options
granted in 1993 for new options granted in 1994. The 1994 options
were exchanged for the same number of options described in the
"Option/SAR Grants in Last Fiscal Year" table in 1995.
(3) The amounts shown in this column with respect to Mr. Latham for 1993,
1994 and 1995 relate primarily to distributions made pursuant to two
plans which were discontinued by the predecessors of the Company (the
"Williams Companies") during 1991. Until such time, the Williams
Companies assigned overriding royalty interests to certain employees
to reward such employees with incentive compensation based on the
results of drilling activities by the Williams Companies. Under this
arrangement, the Williams Companies assigned overriding royalty
interests in certain oil and gas leases to certain employees who were
employed at the time of the execution of the lease. An individual
employee's overriding royalty interest in a lease was determined in
the discretion of the management of the Williams Companies. Employees
receiving overriding royalty interests were entitled to receive
revenues immediately upon the assignment thereof and such interests
were not subject to forfeiture. The Williams Companies also granted
selected employees working interests in certain of the oil and gas
properties of the Williams Companies. Such working interests were
deemed earned by and granted to such employees upon terms determined
in the sole discretion of the management of the Williams Companies.
The Company does not anticipate reinstituting either of the
arrangements described above.
4
<PAGE>
In addition, the amounts shown include contributions made by the
Company for the named individuals during 1995 pursuant to the
Company's 401(k) Plan, as follows. Mr. Williams, $5,653; Mr. Latham,
$2,282; Mr. Riggs, $1,695; and Mr. Tisdale, $1,465. Contributions
made by the Company for the named individuals during 1994 pursuant to
the Company's 401(k) Plan were as follows: Mr. Williams, $3,852; Mr.
Latham, $1,673; Mr. Riggs, $1,360; and Mr. Tisdale, $1,026.
Contributions made by the Company for the named individuals during
1993 pursuant to the Company's 401(k) Plan were as follows: Mr.
Williams, $6,248; Mr. Latham, $2,138; Mr. Riggs, $1,562 and Mr.
Tisdale, $1,159.
(4) Mr. Williams beneficially owns through the Affiliated Holders and
other affiliates, 2,875,000 shares of restricted Common Stock with a
value at June 10, 1996, of $22,640,625.
The Company has no employment agreements with any of its executive
officers. Although Messrs. Williams and Latham devote a majority of their time
to the Company, both of them are engaged in other business activities. Mr.
Williams devotes a portion of his time to certain affiliated companies (the
"Williams Entities"). Mr. Latham is also employed by and devotes a portion of
his time to the business of certain Williams Entities. Both Messrs. Williams
and Latham receive compensation from the Williams Entities which compensation is
not borne, directly or indirectly, by the Company and does not relate to any
services provided to the Company. In addition, Jerry F. Groner, Vice President-
Land and Lease Administration and a son-in-law of Mr. Williams, spends a portion
of his time managing JACCK, L.L.C., an entity owned by the five children of Mr.
Williams which is involved in oil and gas exploration in the Permian Basin area
of West Texas and Southeast New Mexico.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
- -----------------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Price Base
Name Granted (#) Fiscal Year ($/Sh) Expiration Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Clayton W. Williams, Jr. 32,407 21.4% 2.375 September 2000 20,578 44,884
L. Paul Latham 13,022 8.6% 2.375 September 2000 8,269 18,035
Mel G. Riggs 9,605 6.3% 2.375 September 2000 6,099 13,303
T. Mark Tisdale 4,200 2.8% 2.375 September 2000 2,667 5,817
</TABLE>
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. The values shown
for 5 percent and 10 percent appreciation equate to a stock price of $3.01 and
$3.76, respectively, at the September 2000 expiration date of the options. The
closing sales price of the Common Stock on the NASDAQ National Market on June
10, 1996 was $7.875 per share.
All options shown above have been granted pursuant to the Plan, which is
more fully described under "Amendment of 1993 Stock Compensation Plan -
Description of Plan" below. Each of the option grants shown in the preceding
table is subject to a vesting schedule which provides that equal portions of the
option representing a fixed number of shares may be exercised on or after
September 14, 1994, 1995,
5
<PAGE>
1996 and 1997. In addition, the Compensation Committee, which administers the
Plan, granted additional stock options under the Plan to all of the officers of
the Company during the first quarter of 1996.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTIONS/SAR
VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of
Underlying Unexercised
Unexercised Options/ In-the-Money
SARs at Options/SARs at
FY-End (#) FY-End($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable(1) Unexercisable (1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Clayton W. Williams, Jr. 0 0 16,203/16,204 $14,178/$14,179
L. Paul Latham 0 0 6,511/6,511 $5,697/$5,697
Mel G. Riggs 0 0 4,802/4,803 $4,202/$4,203
T. Mark Tisdale 0 0 2,100/2,100 $1,838/$1,838
_______________
</TABLE>
(1) The option price of each of the options set forth above is $2.375 per
share, while the average of the Company's bid and ask price on the
NASDAQ National Market on June 10, 1996 was $7.875 per share.
AMENDMENT OF 1993 STOCK COMPENSATION PLAN
GENERAL
An amendment to the Plan was adopted and approved by written consent of the
holders of more than a majority of the outstanding shares of Common Stock
entitled to vote on the amendment to the Plan. Such written consent is dated as
of June 1, 1996, and was provided to the Company at its principal offices on
June 1, 1996. The Company's Restated Certificate of Incorporation and Delaware
General Corporation Law expressly provide for such action by written consent of
the holders of at least the number of shares required to have approved such
action at a meeting of the stockholders at which all of the shares entitled to
vote thereon were present in person or by proxy. The amendment to the Plan
required approval of at least a majority of the shares entitled to vote thereon,
and such approval was obtained by the written consent of Clayton Williams
Partnership, Ltd. and CWPLCO, Inc., which own, in the aggregate, 3,772,009
shares of Common Stock, being 50.5% of the outstanding shares of Common Stock
entitled to vote on such amendment. See "Information Concerning Security
Ownership." Such action by written consent has the same force and effect as any
action taken by the stockholders at a meeting thereof. Because this action has
already been taken, you are not being asked to vote or submit a proxy in
connection with this matter and are being provided with this Information
Statement only to advise you of the amendment to the Plan which has been adopted
and approved by stockholder consent. Pursuant to federal securities laws, no
corporate action will be taken pursuant to this stockholder consent, such as
granting options based upon the increased number of shares of Common Stock
authorized and reserved under the Plan, for at least 20 days after this
Information Statement has been mailed to the stockholders of the Company.
6
<PAGE>
DESCRIPTION OF PLAN
The Plan provides for the grant of non-qualified options to Officers,
Directors (other than Outside Directors), employees and advisors of the Company
or a subsidiary of the Company. Prior to the adoption of the amendment to the
Plan hereinafter described, a total of 298,200 shares of Common Stock was
authorized and reserved for issuance under the Plan, subject to adjustments to
reflect changes in the Company's capitalization resulting from stock splits,
stock dividends and similar events. The Plan is administered by the
Compensation Committee, which consists of the Company's three Outside Directors.
The Compensation Committee has the sole authority to interpret the Plan, to
determine the persons to whom options will be granted, to determine the basis
upon which the options will be granted, and to determine the exercise price,
duration and other terms of options to be granted under the Plan; provided that
(i) the exercise price of each option granted under the Plan may not be less
than the fair market value of the Common Stock at the date of grant of such
option, (ii) the exercise price must be paid in cash upon exercise of such
option, (iii) no option may be exercisable more than ten years after the date of
grant, and (iv) no option is transferable other than by will or the laws of
descent and distribution. No option is exercisable after an optionee terminates
his relationship with the Company or a subsidiary of the Company, subject to the
right of the Compensation Committee to extend the exercise period for not more
than 90 days following the date of termination of an optionee's employment. If
an optionee's employment is terminated by reason of disability, the Compensation
Committee has the authority to extend the exercise period for not more than one
year following the date of termination of the optionee's employment. If an
optionee dies and has not fully exercised options granted under the Plan, such
options may be exercised in whole or in part within 90 days of the optionee's
death by the executors or administrators of the optionee's estate or by the
optionee's heirs. The vesting period, if any, specified for each option will be
accelerated upon the occurrence of a change of control or a threatened change of
control of the Company. The Plan may be amended by the Board of Directors of
the Company in any respect without stockholder vote unless the amendment
materially increases the number of shares which may be awarded under the Plan,
materially increases the benefits accruing to participants under the Plan, or
materially modifies the requirements for eligibility for participation under the
Plan.
TAX MATTERS
The Options covered by the Plan described above will be classified as "Non-
statutory Stock Options" and their taxation will be governed by Section 83 of
the Code and the regulations thereunder at Section 1.83-7. Whether an optionee
is taxed upon the grant of a Non-statutory Stock Option generally depends on
whether the option has a readily ascertainable fair market value on the date the
stock option is granted. If there is a "bargain element" in the option, E.G.,
the option price at which the optionee could exercise is less than the current
fair market value of the underlying stock, then the optionee could be taxed on
this difference at the date of grant, assuming that the optionee's rights in the
options are transferrable and not subject to a substantial risk of forfeiture.
Under the Plan, the options are not generally transferrable and do not appear to
be subject to a substantial risk of forfeiture and it would appear that the
price of the underlying stock contained in the option would be at the fair
market value of the Common Stock on the date of the grant and as a result there
is no "bargain element." In addition, in the case of an employee of the
Company, the options are conditioned upon the optionee's continued employment
with the Company. Therefore, the options would not be taxable to the optionee
until such optionee exercises the option, at which time he would recognize
income on the difference between the price at which he purchases the shares and
the fair market value of the shares at the time of exercise.
7
<PAGE>
The grant of a Non-statutory Stock Option to an optionee in connection with
his service with the Company is treated by the Company as if the Company paid
compensation to such optionee at the time and in the same amount in which the
optionee is considered to have realized compensation.
THE AMENDMENT
The Plan was amended to increase the aggregate number of shares of Common
Stock authorized and reserved for issuance upon exercise of options granted
under the Plan from 298,200 shares to 898,200 shares. The options already
granted under the Plan cover substantially all of the shares originally
authorized and reserved for use under the Plan. In order to continue providing
the incentive to the officers, directors and employees of the Company for which
the Plan was created, additional authorized and reserved shares of Common Stock
needed to be made available under the Plan. The Board of Directors and
Affiliated Holders determined that it is in the best interest of the Company to
increase the aggregate number of shares of Common Stock available under the Plan
so that additional options can be granted to fulfill the purpose of attracting,
retaining and rewarding officers, directors and employees of the Company as
provided in the Plan.
Upon the expiration of twenty (20) days from the date this Information
Statement is mailed to stockholders, the Company intends to file a Post-
Effective Amendment to the Registration Statement on Form S-8 with respect to
the Plan to register under the Securities Act of 1933 the additional shares of
Common Stock authorized and reserved for issuance under the Plan. No options
will be granted with respect to such additional shares until such Post-Effective
Amendment to the Registration Statement is effective.
The effect of the amendment to the Plan on the benefits available to the
Officers and Directors of the Company cannot be specifically determined at this
time. Generally, the amendment will allow additional options to be granted to
such persons under the Plan, but the benefits to such persons will be unknown
until such additional options are granted. The benefits and amounts of options
already granted to the executive officers under the Plan are set forth herein
under "Executive Compensation".
INTEREST OF PERSONS IN ACTIONS TAKEN
The Officers and Directors of the Company have an interest in the amendment
to the Plan to the extent they are eligible to participate therein, since the
amendment will allow additional stock options to be granted to such persons
under the Plan.
By order of the Board of Directors,
Mel G. Riggs
Secretary
Dated: June 20, 1996
8
